There’s more than one way for a startup to grow to global dimensions and achieve “unicorn” status, and Southeast Asia offers that opportunity to build on initial success due to its large population and expectations the region is “the next China”.
The region’s population is around 655.6 million, almost half that of China’s 1.415 billion people. And Southeast Asia is twice as big as the United States with its population of 326.8 million.
According to a recent Google-Temasek study, the Internet economy of the region will reach US$240 billion by 2025. It is already the world’s fastest growing Internet economy, with 480 million Internet users expected by 2020, up from 260 million now.
Southeast Asia boasts many large corporates that increasingly focus on innovation and would like to disrupt their industry.
Thus, RISE is positioning itself as the regional corporate innovation accelerator for Southeast Asia. The company’s mission, says Supachai Parchariyanon, the RISE founder and chief executive officer, is to drive 1 per cent of the gross domestic product for Thailand and the region through its corporate innovation platform.
“To increase GDP by 1 per cent is equal to creating 1 million new jobs for people,” said Supachai.
RISE has already added 0.1 per cent to the GDP, he claims, and that is worth around $400 million (Bt12.7 billion). This number is derived from adding the total valuation of all the startups under the RISE accelerate programme that have raised three years of funding, along with the total value of real business when startups and corporates work together.
In 2019, it aims to increase this impact to $1 billion, or around 0.25 per cent of GDP. RISE plans to rapidly ramp up its executive training from 1,000 to 10,000 senior managers this year. And it will oversee the Corporate Innovation Summit 2019, on March 28-29. Later, it will host RISE Innovation Week in the third quarter of this year.
Together, this programming aims to help Thailand to become the region’s hub of corporate innovation.
“It is not just another tech summit, but more like the APEC summit where the leaders of Asian countries participate. More details will be disclosed soon,” said Supachai.
Thailand’s main strength lies in its large number of large corporates, he said. In 2018, around 60 per cent of the total number of startups received investment from Thai corporates. To drive the country’s economy, collaboration between corporates and startups is key. For example, he said, “the latest rounds of investments of Grab and Gojek were funded by corporate venture capitalists.”
For Thailand, and Southeast Asia generally, to grow through digital disruption will require the drive that comes from corporate innovation. And RISE is a pioneer in corporate innovation. Now the largest corporate innovation accelerator in the region, RISE has graduated 1,000 startups, from 20 countries around the world, and with 50 per cent from SEA, in the past three years. Total valuations are almost $1 billion.
“Our mission to help corporates do innovation. Working with startups is one of the other ways, and startups can help corporates reduce costs or increase revenue,” said Supachai.
RISE also helps corporates innovate though its Corporate Innovation Academy, which features an “intra-preneur” programme.
Through its many detailed programmes, the academy helps corporates build their own innovation startup culture, practices and units. About 1,000 executives from large Thai corporates underwent RISE training, with these corporates together accounting around 25 per cent of the country’s total marketing capacity.
Moreover, under its “venture builder” programme, RISE has set up two joint ventures with public companies, helping them to build new business through bringing in startups as third parties. In the last quarter of 2018, RISE expanded this component in two ways. It set up seaX funds (SEA Exporetential Fund) in the US worth $50 million (Bt1.5 billion) to make seed investments in startups. And it has already invested in two startups in Y Combinator.
“Our mission is to not only gain returns, but also to be a strategic investment for corporates, to leverage startups for corporate innovation, it is likely to sourcing startups to corporates though funding,” said Supachai.
It now has a database of 10,000 corporates in SEA, and plans to expand this throughout SEA with a variety of events and activities.
RISE has collaborated with Bank of Ayudhya Public Co Ltd, or Krungsri Bank, to establish the “Krungsri RISE” fintech accelerator, which has graduated a total of three batches. All 12 startups from those batches have attracted investment. In the latest batch, 100 per cent of participating startups were plugged in to Krungsri Bank.
Making an impact
“We focus on the real business impact rather than the number of startups receiving funds, since we are a corporate innovation accelerator,” said Supachai.
After the end of batch one, Krungsri set up a Bt1 billion fund, and dedicated investments for three years in startups from Krungsri RISE Accelerator. The challenge was not accessing money, but finding startups of sufficient quality to warrant the investment injection.
For each batch, RISE has accelerated about 10 to 15 startups. In batch one, FINNOMENA, a Thai fintech startup in wealth management, received US$3.2 million (Bt102 million) in its Series A round funding from Krungsri Finnovate and two investors, Benchachinda and 500 TukTuks.
Meanwhile, in batch two, Baania (Thailand) received investment from Krungsri Finnovate, PTT, AddVentures by SCG, and 500 TukTuks. Investment in batch three will be announced soon.
“In every batch, we have had successful cases. Not every startup in our programme can be plugged in with Krungsri,” said Supachai.
As well, RISE operates the Thailand National Accelerator of the Digital Economy and Society Ministry, where 500 startups joined the programme in one year. Around 100 of these startups received funding from the Digital Economy Promotion Agency (Depa) across stages of funding.
“We connected these startups into our networks in 20 counties worldwide,” said Supachai.
RISE also helps PTT run its own accelerator, operating in five countries – Singapore, Indonesia, Malaysia, Vietnam and Thailand.
The company will deploy the accelerator programme in these countries and recruit startups there.
Around 70 per cent of startups from this programme can join PTT Group’s business.
“We have the secret sauce to accelerate corporates to move as fast as startups, so we called our accelerator the three-month ‘growth accelerator’”, said Supachai.
RISE is also helping government agencies to nurture corporate innovation. It is now working with agencies in six ministries to redesign their governmental services.
For example, it is aiding the Revenue Department in redesigning the donations e-receipt system used for tax deductions.