NIA reworks support programme for innovative startups

The National Innovation Agency (NIA) is overhauling its financial support programme for startups to accelerate their progress, facilitating access to 44 billion baht in funding from various sources and targeting 1-2 unicorns in five years.

The NIA defines a unicorn as having a valuation of at least 1 billion baht.

The funding of overseas and local investors for the local startup community stands at 44 billion baht at present, but the number of local startups is still very small, said Pun-Arj Chairatana, executive director of the NIA.

The fund’s size has increased by 5-6 times in the past two years, with domestic funding accounting for the majority, he said.

Some 15% of total funds is from telecom, 75% from banking and conglomerates, and 10% from others.

The NIA found only 50% of local startups had prototypes, while 30-40% can raise funds by growing their businesses.

The growth of startups is very limited because they don’t have a global or Southeast Asian perspective, they lack deep technology and cannot access investors nor the market, said Mr Pun-Arj.

The only unicorn in Thailand is Omise, a payment gateway startup, but it raised funds via initial coin offering.

He expects a large deal in Thailand this year, in particular by conglomerates or an acquisition of a foreign startup, such as Central’s purchase of a stake in Grab Thailand for US$200 million, or Beacon VC investing $50

million in Grab for GrabPay service.

To stimulate the growth in local startups and innovative-based business, the NIA has redefined its financial support model, changing from a focus on grant/ funding based on each innovation

project to the role of system integrator to bridge and facilitate startups, venture capital (VC) firms or corporate VC.

The strategy aims to build 3,000 innovation-based startups in the next 10 years.

The new financial support strategy will cover grooming, granting and growth schemes.

At the stage of grooming, university students will be trained to become new startups. Some 40,000 students in the past three years have networked with NIA, but only 40 registered new companies.

The programme will train and network with master’s and doctorate students to help build deep tech entrepreneurs.

In the grant stage, the scheme offers funds supporting two groups: thematic innovation and open innovation.

The first group targets a maximum of 5 million baht through six areas that use Internet of Things technology — healthcare, food, herbs for chronic non-communicable diseases, national defence, travel, and smart logistics/ manufacturing industry. The NIA is open for project proposals from today to March 31.

The open innovation targets a maximum 1.5 million baht in bio-economy, production, recycling economy, and service and sharing economy.

The NIA connects its existing entrepreneurs and startups to an international network to help expand marketing overseas, and has an innovation district strategy as a landing pad for foreign VCs and to build startups focusing on the public sector through the Government Procurement Development Program for Enterprises.

Mr Pun-Arj said the NIA offers 300 million baht to support innovative startups.