Thailand still chasing elusive unicorn

Thailand still chasing elusive unicorn

Startup economy just getting started, writes William Hicks

Ms Kua of Sunday Ins wants to eventually move her company into new verticals, similar to
Ms Kua of Sunday Ins wants to eventually move her company into new verticals, similar to

As the second largest economy in Asean, it remains a point of wounded pride that Thailand still lacks a major internationally recognised startup.

Despite recent efforts by both government and large firms like True Corporation and InTouch Holdings, no Thai startup has come close to reaching the coveted "unicorn" status or US$1 billion valuation. And its startup ecosystem is still relatively fledgling compared to regional competitors Singapore and Indonesia, which have each produced several unicorns of their own.

"I think we can be the first one in Thailand," said Cindy Kua, 31, founder of Sunday Ins Co, a Bangkok-based insurance tech company, speaking with the Bangkok Post in Singapore.

On May 23, she gave a speech at one of the city's many well-attended startup conferences, Echelon 2019, hosted by the media site e27. It exhibited over 100 startups, and Ms Kua touted insurtech as the next breakthrough "digital wave" in the tech industry.


"The most successful new companies in Southeast Asia have been ride-hailing apps like Grab and Go-Jek, or e-commerce like Lazada, but now its very difficult to break into those markets," she said. "I really think the next big unicorn will be in insurance."

Many major tech companies like Grab are moving into financial services, but many simply want to act as brokers for insurance without actually being at risk of having to pay out policies. Sunday, which began in August 2018, is a fully vertical insurance company that works with employers to offer customised health plans, where employees can create their own policy, adjusting premiums in outpatient and inpatient care to form a personalised monthly rate, a B2B2C business. If offers car insurance via a similar, direct-to-consumer model.

Ms Kua touted her high-profile partnerships, like with Grab, where Sunday offers auto insurance to the ride-hailing app's drivers in Thailand, as well as with Total Access Communication (DTAC) to offer travel insurance to DTAC users buying overseas roaming minutes.

She said the company sets itself apart from startup competitors and older legacy insurance companies through its personalisation, more expansive customer data and use of open source artificial intelligence (AI) and machine learning to calculate more accurate insurance rates. But like most early startups, whether its technology is truly breakthrough or just empty buzzword marketing is up to investors' willingness to carry them through continued rounds of funding.

In February the company received $10 million from Vertex Ventures, a Singapore-based venture capital firm that helped raise Grab from fledgling startup to regional hegemon and is known for being very selective in its investments. The amount was quite high for a Series A round because Sunday already had a costly licence to sell non-life insurance that it acquired through a merger and acquisition of an undisclosed company, said Ms Kua.

"Sunday is the first startup Vertex invested in from Thailand," she said. "They are looking for the next billion-dollar company and the only place they think it will be is in fintech."

But before the money came in from Vertex, it is not hard to guess where the funding came from. Ms Kua, originally from Kuala Lumpur, comes from insurance royalty. Her father, Kua Sian Kooi, is one of the richest men in Malaysia and the founder of KSK Group, currently a holding group that started in insurance and moved into hotel and property investment.

"Insurance is in my blood," Ms Kua said. "My father built a multi-billion-baht company, but I hope to beat his target."

This would put Sunday in competition with the insurance arm of KSK Group, as Sunday plans to move into Malaysia, Singapore and Indonesia over the next five years, but currently the biggest hurdle is attaining insurance licences in new markets.

"Thailand only has 70 million people, so you can only grow so far. You have to think regionally," she said. "It's all about scalability and we see reaching across Southeast Asia with its population of 600 million, with high internet and mobile penetration."


Despite her Malaysian roots and powerful connections, Ms Kua chose Bangkok as the headquarters for her startup because of the mix of talent and affordability.

"I looked at Kuala Lumpur, then Singapore was too expensive, but in Bangkok we could find the best talent and hire a team the fastest."

Some talent is still hard to find, even with Thailand's generous visa allowances for foreign tech workers. The 160-employee company wants to grow to 200 by the end of the year, but data scientists, data engineers and software engineers are proving exceptionally hard to find.

Lukas Denk, deputy chief executive at Chilindo, an auction-based e-commerce site based in Bangkok, said the city has to attract many more investors and VCs if it wants to grow into a competitive startup city.

Chilindo, which also had a booth at the Echelon event, was one of the few Thai startups in attendance, far outnumbered by Malaysian, Indonesian and mostly Singaporean startups.

"There needs to be a mentality shift in Bangkok to make it easier to get funding," he said. "There needs to be more Thai VCs and more large firms in Thailand willing to invest in startups."

He said Chilindo is able to sidestep directly competing with large e-commerce sites like Lazada and Shopee by offering auctions and on-the spot deals instead of a massive inventory of products for users to search through.

This makes his market segment smaller than other e-commerce sites, which means if his startup wants to be valued in the billions it would have to expand to the whole world, said Mr Denk.

"If you try to compete with the major, established companies you are going to lose," he said. "Even some e-commerce companies that move into logistics don't have the scale to compete, so you really have to do something different if you want to grow your company into a major player today."

Few companies are working harder to build a healthy startup ecosystem than True Corporation, as True Digital Park offers an incubator, office space and hot desks for fledglings and more established startups.

"There's a few rich families and companies in Thailand that are making a push, like CP Group or Central Group, to move the tech industry forward," said Tarit Nimmanwudipong, head of commercial at True Digital Park, which also had a booth at Echelon. "We're still in the early stages, but the sector's growth is definitely accelerating in Thailand. I can see fintech as being one of the breakthrough technologies for new tech startups."

While Thailand still lacks large emerging players, it hardly lacks in ambition.

"Amazon is known as an e-commerce company, but makes most of its profits from its web and cloud services," Ms Kua said. "I hope we can expand Sunday like that and move into new verticals that can move our profits beyond insurance."

Sunday won't release its revenue figures but claims it doubled revenue in 2017-18 and plans to grow four times this year.

While Ms Kua does not expect to reach profitability for 7-8 years, she said Sunday Ins could be valued at $1 billion in as early as six.

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