Five Thai corporations have invested in 500 TukTuks, the local operating unit of US venture capital 500 Startups, aiming to make Thailand an innovation and deep tech destination in Southeast Asia.
The five companies are Central Group, TCP Group, Thairath Group, Saha Group, and the South East Insurance Company.
By 2023, 500 TukTuks aims to build at least seven local startups that each have a valuation of more than US$100 million (3.21 billion baht), making the country more attractive to big tech investors.
To attract big investment in tech startups, Thailand must have "centaurs", startups that have a valuation of more than $100 million, showcasing high competency and their potential here, said Krating Poonpol, managing partner of 500 TukTuks.
The country only has seed round funding for startups, for less than $1 million, and few series A rounds for valuations above $1 million, creating a bottleneck for growth, he said.
Thailand needs to have more series B and C funding rounds to draw bigger deals with higher valuations.
Local startups need to innovate, not copy ideas, and go beyond the domestic market to Southeast Asia, said Mr Krating.
The government needs to execute regulations to facilitate foreign venture capital and startups in Thailand by speeding up the smart visa approval process.
The valuation of startups in Thailand is 20-30% lower than Singapore because of barriers to doing business.
Mr Krating said in the first year of 500 TukTuks, which opened three years ago, it invested 400 million baht from a total fund of 550 million in 50 startups, mostly seed stage funding.
Of the startups the company invested in, 47% of startups successfully raised funding of almost 7 billion baht and created at least 10,000 jobs.
"In 2018, we believe that 500 TukTuks can help at least 2-3 startups reach a valuation of $100 million each," he said.
Mr Krating said 500 TukTuks will expand investment in series A funding for not only digitally disruptive technology but also deep tech startups that heavily rely on R&D.
The company will invest in food tech, e-commerce related areas, travel, agritech, logistics, fintech, health, energy, property tech, insurtech, artificial intelligence, and biotech.
"We will consider more startups that can work with our corporate investors," he said.
500 TukTuks wants to invest in Cambodia, Laos, Myanmar and Vietnam.