dtac accelerate batch 7 helps Thai startups become unicorns

dtac accelerate introduces the batch 7 with a new program, A Academy, for startups that receive Series A round of funding by venture capital and corporate venture capital firms between US$1 – 15 million. The program helps create opportunities for Thai startups, that are struck with Series A bottleneck, to grow by getting closer to the funding sources in Asia and worldwide.

Presently, dtac accelerate’s portfolio consists of 6 startups in Series A round and 23 startups with seed funding that is in between US$20,000 – 50,0000. They still cannot raise to the Series A round. Therefore, the A Academy will help these startups reach the Series A round of financing by focusing on preparation for mega-funding round, connection with customers, and adaptation of advanced technologies, such as machine learning and AI, to the business.

The A Academy program tends to boost up the startup company values to 100 million USD. The program is a part of dtac accelerate to make Thai startup become a unicorn. The goal of dtac accelerate batch 7 is to look for businesses that adopt technologies to develop solutions for a variety of industries, such as healthcare, agriculture, real estate, energy, e-commerce, tourism, insurance, etc.

Sompoat Chansomboon, Managing Director of dtac accelerate, stated that less than 10% of total Thai startups have steadily received funding from Seed to Series A round, which certainly is a very small number. Thus, dtac accelerate has helped unlock the potential of Thai startups to secure the funding in Series A round, so that they can grow their business and will not become zombies. Twenty-five percent of dtac accelerate startups receive Seed to Series A round of funding, compared to the national average of 10%. dtac accelerate wants to increase this figure of investment in Thai startups.

According to Techsauce Startup Report 2018, the investment in Thai startups had been constantly rising since 2015 until 2018, when the funding was down to 61 million USD from 105 million USD in 2017. There were no big deals worth over 50 million THB in the previous year.

Three main reasons for not having immense investments on Thai startups:

1. Investors have found other countries in Southeast Asia more attractive than Thailand. For example, they invest in Vietnam since Vietnamese people possess more technological capabilities than Thai people do, resulting in 92 financing deals with the total valuation of US$890 million.
2. Intense competition from the super app platforms, which cover all services for people’s daily life, forces startups in small and medium-sized businesses to step aside as they cannot compete with these super applications, e.g., Line and Grab. The super application can easily find partners or engage in merger and acquisition to create ecosystem and offer new services that address customers ‘needs by just one application, such as delivery service, food delivery, financial service, etc.
3. The customer acquisition cost (CAC) has continuously rising. Many startup businesses have started to change from B2C (Business to Consumer), selling products or services directly to individual customers, to B2B (Business to Business), selling products or services to corporate customers or between businesses, because they can generate greater revenues. However, the effective B2B that is a repeatable and scalable business model is very difficult to achieve.

In 2018, there were 34 Thai startups secured US$61 million in investment. Seven of them are startups in dtac accelerate program with the total funding of US$11 million dollars or 17% of the total investment in Thailand in the previous year. The successful Thai startups are Fastwork, which received the highest valuation of investment from Series A round of funding and Ricult, which secured the funding in the Seed stage, the highest fundraising deals among agricultural tech startups in Southeast Asia.

Alexandra Reich, dtac CEO said dtac’s greater ambition is to go beyond connectivity and build strong industry ecosystems that can support 5G sustainably.

dtac accelerate has a total of 46 startups in the program with a combined valuation of over 5.1 billion baht and the success rate of 70% of its startups receiving follow-on funding that is worth total of 870 million baht.