Bangkok’s startup scene has blossomed in the past few years. Thailand has continued to develop itself, despite its long history of political and economic instability. The startup scene defies Thailand’s history and has seen incredible growth, with its capital city Bangkok leading the way. Bangkok is no longer the underdog of the global startup community. It is one of the leading startup scenes in Southeast Asia today.
Here are seven reasons why Bangkok should be watched closely as it grows into the next Silicon Valley:
1. Bangkok is a Cosmopolitan City
The modern, cosmopolitan city of Bangkok has been voted the world’s top destination four years in a row by Travel & Leisure magazine. The city is a wonderful tourist spot (Thailand is ranked 2nd for tourism in SEA) with endless sights, restaurants, shopping, nightlife, and neighborhoods.
Bangkok has seen drastic improvements in recent years to its downtown and business areas with modern sky-rises and large shopping malls, as well as a huge improvement to safety. Along with the liberality of the Thai lifestyle, the low cost of living is a major draw. Simply put, Bangkok is an exciting and affordable place that is quickly attracting foreign talent to live and work.
2. Bangkok Offers Affordable Living and Working
Entrepreneurs have been attracted to Bangkok not only for the exciting city itself, but because it is highly affordable to operate a startup. Office rent for a scaling startup is roughly the same as housing rent. The prevalence of co-working spaces has also allowed for manageable business operations. This practice of sharing an office space with a partnering company or investors has become very common in Bangkok. Fostering a collaborative culture in the startup scene has also become quite popular.
3. Bangkok Startup Community Scene
As the startup scene grows, so has the fostering community that surrounds it. Numerous conferences, organizations, and government-backed programs were launched in recent years to help foster the Bangkok startup scene. These conferences and programs are targeted at educating startup enthusiasts and digital nomads, including: Thailand Startup Summit, Thailand Entrepreneur Summit, Startup Thailand, and many more. Many of these conferences have doubled their attendance in the past year.
Techgrind, HUBBA, and many other organizations have emerged from the startup scene that design events to gather and educate tech and startup enthusiasts. Bangkok’s strong community further exemplifies the collaborative culture that is unique to its startup scene.
4. Government Initiatives
Thailand’s government has made initiatives in recent years to support economic growth. Notably, the government has been finding ways to further improve transportation. Last August, the government approved $75 billion of transport plans to renovate all of the city’s ports and train systems. This eight year project is set to link Thailand with Laos, Malaysia, Singapore, and Southern China. Increasing the connectivity to the rest of Asia will only further drive growth for the Bangkok startup scene.
5. Startup Friendly Environment
The rise of startups and SMEs have been extremely beneficial for its economy. According to the Thai SEC, SMEs account for 37% of GDP and 78% of employment. Thailand’s Board of Investment (BOI) has made initiatives with startups in mind; including an eight-year tax exemption for new companies investing 1 million THB (around $30,000 USD). Additionally, The Thailand Treaty of Amity has enabled US investors to avoid ordinary foreign restrictions. In 2015, Thailand was ranked 26th on the World Bank’s Doing Business Index. With regulations further improving, the startup scene has a sustainable foundation supporting growth.
6. Rise of Social Media and Mobile Users
The prevalence of social media is a growth driver for the Bangkok startup scene, especially in the e-commerce industry. According to Tech in Asia, there are currently 24 million mobile app users. Additionally, the mobile penetration rate is 147%. Furthermore, over a quarter of all mobile device users have a smartphone. Amit Anand, managing partner of Singapore-based Jungle Ventures, said:
“You can scale a company [up] very quickly in Thailand if you have a good product because of what happens on social media.”
Funding for startups is becoming more readily accessible with more financial mediums for raising capital. In 2014, Thailand secured over $30 million in global funding for startups, according to The Nation.
Currently, there are six venture capital firms, and five major incubators and accelerators based in Bangkok. More investment firms are willing to come to Thailand as the startup market increases. This opens up opportunities for young entrepreneurs to gain funding. In most cases, startups should be worth at least 30 million THB in order to gain funding from venture capitalists.
The global growth of equity crowdfunding has found its way into Thailand. There are two equity crowdfunding platforms that were launched in 2015. Equity crowdfunding is gaining more traction and even more support from the SEC to help close the financing gap.
There are many reasons why Bangkok will be the next Silicon Valley.
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