Thailand lags in startup creation despite strong economy

Despite robust digital connectivity, Thailand's startup ecosystem remains largely unexplored.

Despite being the second largest economy in the region with a significant population and high internet connectivity, Thailand surprisingly hosts only a fraction of the startups found in neighbouring countries like Singapore.

Benjamin Fingerle, Managing Director and Partner at BCG, said that with over 90% of households connected to the internet and more than 80% of the population engaging in e-commerce, the country has all the right fundamentals for a booming startup ecosystem. 

Yet, Fingerle pointed out, "Thailand doesn't produce the number of startups that you could expect it to produce." He noted that with only 180 known startups, Thailand presents a stark contrast to Singapore's vibrant startup landscape, suggesting a large, untapped opportunity for founders and investors alike.

Hanno Stegmann, Managing Director and Partner at BCG X, highlighted the current trends shaping the investment landscape, including the burgeoning interest in AI and generational AI technologies, the shift from B2C to B2B business models, and the focus on businesses that offer immediate unit economics and profitability. 

He mentioned that notably, industries such as Industry 4.0, software as a service (SaaS), financial technology (FinTech), and climate technology emerge as areas with significant potential for growth.

Further exploring the appeal of specific sectors, Fingerle elaborated on the opportunities within the FinTech and climate tech sectors. He observed that Thailand's history of digital innovation, particularly in the banking sector, combined with a considerable unmet demand for banking services, creates a fertile ground for FinTech startups.

Additionally, the global push towards sustainability has positioned climate tech as another promising avenue, especially given the Thai government's ambitious Net Zero targets and the country's presence of world-class companies competing on the global stage.

Stegmann pointed out that a significant portion of the Thai population remains unbanked or underbanked, offering FinTech startups the chance to revolutionise customer experiences with more intuitive financial products. 

Similarly, the climate tech sector stands to benefit from the digital capabilities that can help companies monitor and reduce their carbon footprints more effectively.