The most in-depth look at Cambodia’s startup landscape found a number of key positives, including a broadening spectrum of funding sources available for startups in the last three years, with an increase in publicly-disclosed deals to more than 12 in 2018!
The report by Mekong Strategic Partners and Raintree (and endorsed by the Board of Capacity Building and R&D (CBRD) Fund, commissioned by the National Institute of Posts, Telecoms & ICT (NIPTIC) and Smart Axiata) interviewed over 120 stakeholders in 2018 to gauge the current startup landscape and act as a solid foundation for the future of Cambodia’s digital entrepreneurial ecosystem.
Geeks in Cambodia read all 32 pages in order to give our highlights:
With over 300 active tech startups in the Kingdom, the next few years will see this number double thanks to the growing awareness of basic digital needs and increasing market opportunities. With 85% of founders being Cambodian, there is clear local knowledge, and this promises to be an exciting time for those in the Kingdom with great startup ideas.
A young population: Out of 16.3 million people, 1 in 2 individuals are under 25 years old
High smartphone penetration: 19.4 million mobile connections (120% mobile penetration) ranks Cambodia within the Top 10 in the world.
Cheap data: $1 per 10GB with significant 3G coverage at 66% of the population
Social internet usage: Over 7 million (43% of the population) active Facebook users, and over 65 thousand Instagram users, the highly social internet usage creates opportunities in advertising and social selling.
Financial inclusion: With 78% of the population unbanked, only 3% having credit cards and 13% using mobile payment users, there is clear room for localised solutions in the local financial market.
The report identified a few categories of stakeholders, let’s have a look!
Entrepreneurs and Startup Teams
With more graduates wanting to be entrepreneurs, many of the founders interviewed were enthusiastic graduates already working on their first startup project. Pitching competitions, hackathons, and seed-stage startup programs sponsored by non-profits, foundations, and corporates also have incentivised and promoted unconventional career options for young Cambodians.
Universities and Training Providers
While most of Cambodia’s 118 higher education institutions offers business courses and 30% offering IT and engineering, there remains a lack of technical talent in the Kingdom, with over 90% of the startup founders surveyed reporting challenges in hiring tech talent.
Corporates & Industry
Corporates can further fuel the booming digital economy by adopting many roles, acting as financial support, strategic partners and as mentors to provide feedback and business insights. A keen eye is needed to collaborate with potential startups that provide scalable industry-wide solutions. Partnerships are needed as well with other stakeholders, especially educational institutions to develop a pool of technical talent.
Individuals & Institutional Investors
Things are looking up for the local investment landscape as well, with positive market conditions and an increased interest in tech, has led to more Cambodian-owned venture capital and angel investments than in previous years, with a doubling in publicly-disclosed startup investments to 10 in the last three years. Fourteen startups received disclosed funding in 2018 alone, equivalent to 5% of active local startups, much higher than many other ecosystems in the world.
Investment can come from various sources, including Ideation programmes, incubator and accelerator programmes, angel investors and angel investment groups, venture capital, private equity and regional programmes.
Many ministries have offered, are offering, or are planning various solutions to startups, including:
Ministry of Commerce: Stay tuned for the new Consumer Protection Law, Competition Law and E-commerce Law.
Ministry of Economy and Finance (MEF): A three to five year tax break for Small and Medium Enterprises, including companies in ICT. National Skills Development Fund and National Entrepreneurship Fund of $5 million each to train talent in tech and entrepreneurship.
Ministry of Education, Youth and Sports (MoEYS): To initiate brand new curricula and pedagogy such as New Generation Schools, the E2STEM program and the STEM Festival.
Ministry of Industry and Handicraft: Launched the Cambodian Young Entrepreneur of the Year Awards.
NIPTICT: NIPTICT Innovation Lab is in the works, an interface for digital innovation and startups from the entrepreneurial community and university research teams.
Ministry of Posts and Telecommunications (MPTC): Provides media exposure for the industry. Capacity Building and Research & Development Fund (CBRD) to create opportunities for entrepreneurs.
Access to information on funding opportunities is the most important form of support according to founders, but less than 15% believe information is readily available for new entrepreneurs.
Cambodia’s rapidly growing digital economy and its increasing presence on a regional and global stage should be a source of pride! Partnerships and close relations between all stakeholders and beyond will bring even more success, riding the current momentum. It will be thrilling to see how innovation and collaboration will transform Cambodia in future years!