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Phnom Penh, Cambodia 20th October 2018

CAMBODIA’S
VIBRANT
TECH
STARTUP
ECOSYSTEM
IN 2018
STAKEHOLDERS
IN THE STARTUP ECOSYSTEM

UNIVERSITIES & INDIVIDUAL &
TRAINING PROVIDERS INSTITUTIONAL INVESTORS
Education providers training Individuals and institutions
technical & startup talent. resourcing startups.

ENTREPRENEURS
& STARTUP TEAMS
People building tech startups.
GOVERNMENT CORPORATES
Policy-makers & agencies & INDUSTRY
that define the legal & regulatory Large private sector corps aligning
framework for startups. with or investing in tech startups.

SUPPORT PROGRAMS
& CAPACITY-BUILDERS
Independent programs incubating or
accelerating tech startups in variety of ways.

This brief report summary is part of a larger research are already working in, or interested in the Cambodian
project that was undertaken to provide an inde- startup ecosystem.
pendent snapshot of the tech startup sector today
While this research includes the views of over 100
up to Q2’2018, characterising existing challenges
startup founders, this is not exhaustive coverage of all
and an outlook for the future of the sector. Through
startups nationwide. It takes a systematic stakeholder
wide-reaching interviews and focus groups with market
approach to provide a comprehensive perspective of
experts, an online survey of startup founders, and con-
the ecosystem.
solidation of existing data, the research aims to provide
a basic resource for all organisations or individuals who
- Cambodia’s vibrant tech startup ecosystem in 2018 (full report). 2018.
FURTHER READING + USEFUL RESOURCES

Published online via smart.com.kh, niptict.edu.kh & raintreecambodia.com
- The Royal Government of Cambodia. 2018. Rectangular Strategy for growth, employment, equity, and efficiency: building
the foundation toward realizing the Cambodia Vision 2050. Phnom Penh: The Royal Government of Cambodia
of the Six Legislature of the National Assembly.
- Chan, P. 2018. Tech innovation sector of Phnom Penh: landscape scoping and narrative of change 2013-2018.
Phnom Penh: Development Innovations.
- Tsang, T. & Poum, C. 2018. Factors affecting women engaging in tech careers in Cambodia. Development Innovations.
- We Are Social. 2018. Digital in 2018 in Southeast Asia. Accessed from: www.wearesocial.com/blog/2018/01/global-digital-report-2018
- Ministry of Post and Telecommunication. 2018. Government Digital Services on ICT Security. Presentation at Strengthening
Government Digital Services on ICT Security Workshop, Phnom Penh, Cambodia.
- Telecommunication Regulator of Cambodia. 2018. Internet Subscribers (Mobile Internet / Fixed Internet): 2014-2018.
- BDtrus Research & Business Consultancy. 2017. Startup ecosystem in Cambodia. Young Entrepreneur Association of Cambodia.
- Middleton, J., Ajadi, S., & Bayen, M. 2018. Start-ups and mobile in emerging markets: insights from the GSMA Ecosystem
Accelerator.
- Wyman, O. et al. 2018. Accelerating financial inclusion in Southeast Asia with digital finance. Asian Development Bank.
- World Bank. 2017. Doing Business 2018: reforming to create jobs - Cambodia (English). Doing Business 2018.
- Chankiriroth S. 2017. Financial technology (FinTech) in Cambodia. Mekong Business Initiative.
- McCarthy C. & Jaffe N. 2017. Ecommerce readiness and opportunities in Cambodia: overview of Cambodia’s ecommerce
market landscape. Mekong Business Initiative.
- Phong, K., Srou, L., & Solá, J. 2016. Internet and mobile phone use in Cambodia. Development Innovations.
- Markova J. & Wray C. 2016. Cambodian IT industry: skills for a digital economy. DigitalRain.
- Startup-Cambodia. 2018. Who’s Who Database. Accessed from: www.startup-cambodia.com/

ABOUT THE AUTHORS
Mekong Strategic Partners Raintree Development
is an investment management and corporate advisory is Cambodia’s first creative office development in
firm specializing in the Greater Mekong Region with Phnom Penh, that supports the tech, entrepreneur-
a particular focus on Cambodia, Laos and Myanmar. ship and education sectors through programs at the
MSP is the general partner for the Smart-Axiata project. Raintree facilitates localisation of interna-
Digital Innovation Fund (SADIF), the first corpo- tional entrepreneurship and education programs in
rate venture capital fund established to support early Cambodia, and provides research input across several
stage technology companies in Cambodia. industry sectors.

www.mekongstrategic.com www.raintreecambodia.com
bk@mekongstrategic.com hello@raintreecambodia.com | [f] [ig] @raintreecambodia

ACKNOWLEDGEMENTS
This research was made possible by the cooperation of the Royal Government of Cambodia, National Institute
of Posts and Telecommunications, and Smart Axiata, as well as the generous contributions of entrepreneurs,
educators, industry experts and investors.
«
Startup
Vol . 01

Kingdom
»
KEY FACTS & FIGURES

6.9%
POPULATION
~16.3 million
53% under 25 years old.
23% urban. GDP

53%
USD $22B
with 6.9% growth
per annum.

CAMBODIA’S VIBRANT
TECH STARTUP ECOSYSTEM IN 2018 90% ~78%
CURRENCY BANKING
Cambodian Riel ~78% unbanked. 3% credit
with 90% card ownership. < 15% mobile
US-dollarised banking participation. Minimal
Technology has the potential to fundamentally Universities and training institutes are intro- economy. capital flow restrictions.
alter consumer behaviours, create unprecedent- ducing more entrepreneurship and technical
ed markets and ultimately transform the way we programs and continuing to explore new cur-

100%
LANGUAGE
live. In the context of the fourth industrial revo- ricula. These programs are being complemented Khmer, with English
lution, Cambodia needs to build a strong digital by an increasing number of project-based learn- spoken relatively
EASE OF DOING widely in urban areas,
sector to strengthen the economy with a higher- ing opportunities - pitching competitions, hack-
BUSINESS and Chinese dialects
skilled workforce, and allow the country to transi- athons, and seed-stage startup programs - with 100% local or foreign owner- spoken amongst
tion from predominantly manufacturing to more over 20 this year alone, sponsored by both non- ship. Relative ease of immigra- significant com-
sustainable industries. profit organisations and corporates. tion for skilled labour. munities.

~74%
Cambodia has a agile consumer market to build The investment landscape is improving, due to
a significant digital economy of technology- relative currency stability, less capital flow restric-
enabled products and services. A young popula- tions compared to neighbouring ASEAN markets, INTERNET
tion, high smartphone penetration at over 50%, and openness to foreign direct investment with ~ 11M internet subscribers
practically no foreign shareholder restrictions. (33% growth from 2017). ~74% penetration.
and cheap data at a mere $1 for 20GB per week,
8M mobile internet connections
enable quick consumer adoption. This presents a Increasing local interest in startup investment is
highly accessible market with great conditions for driving the establishment of Cambodian-owned
testing products. This market agility is reinforced
by relatively high English language proficiency in
venture capital and more angel investments. The
number of publicly-disclosed startup investments 118%
MOBILE
7M
SOCIAL MEDIA
urban areas compared to other regional markets. has doubled since 2015 to over 10 this year, as well
18.9M mobile phones
as increased diversity of funding sources. Corpo-
equivalent to 118% mobile 7M Facebook users
Cambodia’s tech entrepreneurship ecosystem has rates are both directly investing in startups but penetration, Top 10 in the (>40% population)
developed into a vibrant and dynamic space, over also supporting the sector to drive innovation and world, 52% smartphone 65K Instagram
penetration users.
the last decade. With an economy underpinned by digitise business.
micro-businesses, the spirit of entrepreneurship is
strong and perceptions of becoming a tech entre-
preneur are more attractive than ever before,
bolstered by emergence of new local role models.
The tech sector is a key part of the govern-
ment’s economic vision and more active support
is emerging with new regulatory frameworks and
>300 >30
STARTUPS STARTUPS
Stakeholders in the startup ecosystem are engag- resources. This was highlighted in the recent gov- >300 active tech INVESTMENTS
ing with entrepreneurs through capacity-building, ernment publication - Rectangular Strategy Phase startups with hundreds >30 publicly-disclosed
more startup ‘projects’ startups with institutional
investment and policy-making. IV. From introduction of preferential business capital investment.
unregistered.
registration and tax incentives, programs such as

>17 >6
the ICT and Women in Tech awards, facilities such
as new innovation labs and national funds of over
$10M announced for tech innovation, policy ini-
tiatives are emerging from multiple ministries. CO-WORKING VENTURE

Things are SPACE
>17 established
co-working spaces
CAPITAL
>6 locally-based investment
funds for tech, >5 international

looking bright. with over
500 desks.
VC fund with active investment
in Cambodia
The table below provides a quick fact-base on startups and investment in the ecosystem.

This early wave of startups are concentrated on basic consumer tech or agency-based models, though more recently there is an emergence of enterprise
solutions. The research takes a broad definition of “tech startup” as any company in early stages of operation that leverages technology as a core part of their
product, or have significant digital channels.

TECH STARTUP LANDSCAPE BY CATEGORY
FINTECH DIGITAL MEDIA & ADVERTISING E-COMMERCE & LOGISTICS

Digital payments, Digital content delivery/streaming, E-commerce sites, social selling, inventory
SaaS for financial institutions, digital advertising and gaming, news media. management systems and delivery services
banking and access to finance.
Eg: Direxplay | Khmerload | Sabay | Soyo Eg: Joonaak | Nham24 | LaRue | Little Fashion
Eg: Morakot | Banhji | Pi Pay | Bong Loy

MATURITY ACTIVE # MATURITY ACTIVE # MATURITY ACTIVE #
Adopted
& growing market > 50 Adopted
& growing market > 40 Market demand validated
scaling & refining market fit > 30
DIGITAL MARKETPLACES DEVELOPMENT SERVICES OTHER DISRUPTOR MODELS

Web development and Transportation: Local Taxi, Tuk Tuk applications that has been operating before Grab/Uber.
Eg: PassApp | WeGo | Exnet
Digital classifieds applications outsourcing for
Maturity: Widely adopted with growing market base. Active # > 10
and booking platforms. domestic and international
clients. Internet-of-things & hardware Hardware manufacturing, IOT solutions & smart devices
Eg: | Bookmebus software. Eg: Koompi | Demine | Robotics | ArrowDot
| Khmer24 Eg: | Codingate Maturity: Early product and early adoption. Active # > 5
| Realestate.com.kh | Web essentials Edtech: E-learning, university management systems, student information services.
| Last2ticket | Biz Solutions Eg: Sala | Edemy Maturity: Early product and early adoption. Active # > 5
| Pathmazing
Healthtech: Healthcare information, management systems and services.
Eg: Healthogo | Sokhakrom
Maturity: Early product and early adoption. Active # > 5
MATURITY ACTIVE # MATURITY ACTIVE #

> >
Agriculture-tech: Platform for agricultural information and innovative
farming practices Eg: Agribuddy Maturity: Early product and early adoption. Active < 5

Adopted
& growing market 20 Maturing &
facing competition 30 MATURITY Various

INVESTMENT & FUNDING LANDSCAPE
PRIVATE EQUITY IPO /
investment SEED VENTURE
/ CORPORATE PUBLIC EQUITY
stage

~ $ 10K - $ 100K $50K - $2M $2M - $20M > $ 10M

selected
active
inverstors

LOCAL & INTERNATIONAL ANGEL INVESTORS

selected Chibi 2016 - USD 92K Joonak 2017 - u/d Realestate.com.kh None to date
notable Bookmebus 2016 - USD 15K Morakot 2017 - u/d 2018 - AUD 2.25M
investements
Camboticket 2016 - u/d Nham24 2018 - u/d Sabay Digital Plus
BongPheak 2015 - u/d KhmerHome 2018 - u/d 2018 - u/d
Agribuddy 2016 - USD 730K Sabay Digital
maturity KhmerLoad 2017 - USD 200K 2017 - u/d
Below are highlights of the research findings by stakeholder group.

It is not exhaustive but presents key developments, challenges and opportunities in the startup ecosystem.

stakeholder group developments & progress challenges to overcome opportunities & recommendations

entrepreneurs - More than 300 tech startups active, which is - Lack of mentorship from professionals from - Introduction of structured mentorship
& startup likely to double in 3 years. legal, financial and strategic fields programs on priority knowledge gaps.
- Local products and role models emerging - Higher-skilled technical talent required, - Engagement overseas for support and ex-
teams
such as PassApp, Sabay, PiPay. particularly with direct experience of building posure, taking advantage of regional programs
- International entrants such as Grab, iFlix and and scaling startups such as Techstars, Seedstars and Echelon.
Netflix accelerating the growth of the digital - Often silo-ed startup teams with limited - Strengthen consumer value proposition and
market. sharing opportunities and platforms product through collaboration across local
startups.

universities - More entrepreneurship and technical pro- - Curricula requires more alignment with - Increased collaboration with industry to
& training grammes offered. market needs and applications. co-design curricula and facilitate project-
providers - More than 25 innovation spaces and labs - Limited teaching and resource to support based learning.
established, to support student learning and student projects. - Incorporate digital literacy in earlier stage
projects. - Limited certified rapid skills training that education.
- Increased participation of students in pre-seed bridges technical skill gaps quickly. - Partnerships with regional education provid-
and seed stage entrepreneurship - Too few students opting to take technical ers to update capacity of faculty and programs.
competitions. majors. - Focus on student diversity (geography,
gender, language) to build talent pipeline and
strengthen admissions.

individual & - More local high net worth individuals and - More alignment of investment expectations - Increased local and regional investor
institutional angels making startup investments. between startups and investors required. networking events.
investors - Growing international VCs interest in local - Lack of assistance for entrepreneurs and - Position investors as mentors and strategic
market such as 500 Startups. startups to be “investment ready”. partners to startups, beyond financial resource
- First local VCs establishing, mostly for early - Lack of strategic alignment with, or direct - Ensure investors bring significant value-add
stage startups such as SADIF. “value-add” to invested startup products. in strategy and business development stages.
- More networking events for local and regional - More investor education required by regional - Increased angel investor education from
investors. tech investment professionals. experienced investment professionals.

corporate - Large corporations looking to transform - Limited medium to long-term involvement - Increased collaboration with universities for
& industry digitally from traditional business models. with startups. developing talent pipeline.
- Significantly increased support for tech - Corporate initiatives often sporadic and - Introduction of more sustained programs
startups through events, programs and direct unsustainable. with startups, drawing on regional/internation-
investment. - Difficulty identifying internal champions to al models including accelerators or industry
- Corporates providing more learning implement innovative programs or approaches mentorship.
opportunities for founders. to the business. - Identify industry champions to ambassador
and lead startup initiatives.

support - Influx of seed-stage co-working spaces such -Limited incubator or accelerator programs for - Provision of structured and sustained incuba-
programs as Smallworld, Impact Hub and Emerald Hub. mid-stage startups - particularly post-seed tor programs in partnership with successful
- Proliferation of pitching competitions and and pre-venture startups. international models, considering other ecosys-
& capacity
hackathons such as Barcamp, SmartStart and - Limited supply of experienced professionals, tem stakeholders.
-builders Startup Weekend. investors and tech experts locally. - Provision of more thorouagh services beyond
- More non-profit funded capacity - More management capacity-building co-working space such as legal, tax and
building such as Development Innovations programs required. regulatory consultation.
and Tek4Good. - Collaboration with regional programs to train
and import mentors.
- Focus on inclusion and diversity in programs.

government - Increasing initiatives by multiple ministries on - Limited understanding of businesses on how - Continued collaboration and consultation with
startup and tech regulatory framework to access new government resources available. tech startup community to test policy delivery.
e.g. Startup Policy Hack. - Clarity on legal and tax processes for startups - Consult with regional partners for policy and
- Introduction of award programs for role- and tech can be improved further. program best practices.
modelling digital champions such as - New policies may face delivery and execution - Increased clarity on processes through online
ICT Awards. challenges. published resources.
- Announcement of new policies for tech - Additional ‘digital champions’ required across - Focus on inclusion and diversity in the
start-ups such as tax incentives and quick ministries to drive delivery of new policy and ecosystem through advocacy.
registration. initiatives, and increase cross-ministry col- - Build narrative of Cambodian startups
- New resources announced such as CBRD laboration. opportunities to overseas investors.
Fund from MPTC and Entrepreneurship - Accelerate policy delivery with working group
Promotion Fund from MoEF. of ‘digital champions’.
INSIGHTS In an online survey of startup founders they provided interesting insights
into the current stage of Cambodia’s tech startup ecosystem and their
FROM TECH STARTUP FOUNDERS aspirations for future developments.

PERCEPTIONS DIVERSITY - NATIONALITY

100% of founders interviewed believed perceptions of being an ~85% of founders are Cambodian nationals.
entrepreneur have drastically improved over the past 3 years. This dynamic is unlike other emerging markets where startups are dominated
This was bolstered by >50% of entrepreneurs stating that being an entrepreneur is generally socially by majority expatriate or foreign national founders, entering the market. We
accepted today. The cultural stigma prevalent in many emerging markets around being an entrepre- believe this is positive for Cambodia in developing truly local solutions, and a
neur versus choosing a more traditional career path seems less of a barrier in Cambodia. sustainable domestic economy.

Corporates generally are leading digital transformation. 17% 27% 56%
INVESTMENT - FUNDING SOURCES

Start-up success stories are widely covered in local media. 21% 24% 55%
~10% of startups have received some level of strategic
Being an entrepreneur is generally accepted as a career choice. 21% 27% 52% investment from corporates or VC funds.
Diversity in funding sources has increased over the past 3 years, alongside an
Universities generally prepare students for a carreer in technology. 44% 19% 37%
increasing number of publicly-disclosed deals at >10 to date this year.
Early-stage start-up support programs are generally accessible. 36% 29% 35%

Universities generally prepare students for a career in entrepreneurship. 52% 24% 24% Estimated Cambodian startups funded by funding scourses

Strongly disagree or disagree Difficult to evaluate Strongly agree or agree

SUCCESS FACTORS - TALENT

> 80% of founders believe availability of high-quality software
engineers will be critical to their success.
Startup founders interviewed emphasised the need for mid to senior-level technical talent with
project management and execution experience. In the short term, the ecosystem will need to look
for international solutions to bolster capacity, while building its own talent pipeline. 2015 2016 2018 Year to date 2018

Grant Seed/VC Private Equity Angels Corporate/Strategic
Availability and quality of software engineers. 37% 45%

Tax incentives. 31% 40%

Access to corporate business for partnership. 49% 31% DIVERSITY - GENDER

Appropriate investment ticket size. 45% 29% < 20% of entrepreneurs are women.
Accelerator and incubator programs for technology. 49% 19% To ensure sustainable growth in the tech sector, it is critical to establish more
programs that support increased gender diversity at all stages in the startup
Not significant Quite significant Significant Very significant pipeline.

SUPPORT - FUNDING INFORMATION

> 70% of founders believe access to information on funding opportunities is significant to 21%
8%

support their success, but less than <15% believe information is easily accessible.
37%
In a comparison of significance of certain support for startups, versus their ability to access such support, showed that
33%
information on funding sources could be improved. ~60% founders also stated feedback from industry experts was signifi-
cant to their success but challenging to access.

Never Weekly Occasionally Infrequently
Significance of supports Accessibility of supports 1-2times/month Once every few months

Info about funding opportunities. 39% 33% 35% 52% 13%

Feedback sessions with investors & experts. 33% 28% 49% 36% 15% > 50% of entrepreneurs have zero or
very infrequent mentorship.
Legal and Tax advice. 27% 32% 61% 27% 12%
Access to quality and regular mentorship remains
Management coaching. 36% 20% 45% 37% 17% a challenge for founders, and most mentorship is
currently received by local peers who have limited
Mentoring. 33% 21% 47% 32% 21% professional experience. Tapping into regional exper-
tise, through support programs such as Seedstars and
Co-working space. 20% 16% 47% 20% 16% Startup Bootcamp, is required to provide mentorship
capacity going forward.
Very important Extremely important Difficult or impossible to access Moderately accessible Easy or extremely easy to access

MENTORSHIP

LOOKING FORWARD & ASPIRATIONS
Cambodia’s digital future is bright, and now is the time for us to catalyse the development of the sector. Stakeholders are open to partnerships that will
boost the digital economy, mindsets are shifting, and there is real energy and momentum to develop this sector. Looking outwards, engaging international
or regional capacity to contribute to this market is key. Collaboration and innovation in local solutions will ensure the ecosystem thrives to produce strong
Cambodian startups that contribute to the global digital economy.