Governments worldwide have increased their attention to assisting digital startups along their scale-up journey, as these companies can play a significant role in a country’s economic growth.
Recently, Silicon Valley-based venture capital firm 500 Startups announced a two-year partnership with Khmer Enterprise, a unit under the Cambodian Ministry of Economy and Finance, to launch Angkor 500, a program intended to assist local startup founders in ramping up their firms and prepare for regional expansion.
“Cambodia’s economy and talent are at an inflection point for rapid growth, and we are confident that this program will help local founders build strong companies that will push the boundaries of what is possible,” Christine Tsai, CEO and founding partner of 500 Startups, said to KrASIA.
As one of the most active global early-stage VC firms, 500 Startups has actively invested in Southeast Asia. In 2013, the company launched 500 Durians, a fund specifically dedicated for startups in the region. Furthermore, the firm had also set country-specific micro funds such as 500 Vietnam, and 500 TukTuks in Thailand.
To date, 500 Startups has backed over 200 companies in the region, with notable portfolios such as Singaporean ride-hailing decacorn Grab, e-commerce platform Carousell, and Indonesian e-commerce unicorn Bukalapak.
KrASIA recently talked with Tsai about the importance of partnerships between VC firms and governments to boost the tech startup environment and help these companies grow.
KrASIA (Kr): What does Angkor 500 represent for your firm?
Christine Tsai (CT): 500 Startups has been investing in and supporting entrepreneurs around the world since our inception in Silicon Valley in 2010. In addition to investing in startups, we also run entrepreneurship and innovation programs globally, where we aim to bring world-class mentorship and education to entrepreneurs around the world to introduce the best of Silicon Valley in a way that embraces a country’s unique qualities and talents, to prepare founders for the global stage.
When building a presence in a country, we value partnering with strong local stakeholders in that ecosystem. To that end, we’re thrilled to be partnering with Khmer Enterprise.
Kr: How can participants of Angkor 500 benefit from other funds for regional startups, such as the 500 Durians?
CT: We will continue to scout promising startups in the country, and the Angkor 500 program will help in that respect by developing local talent. By participating in the program, Angkor 500 participants will learn from in-house experts who will help with strategies and challenges. Participants can also attend exclusive networking opportunities and be able to tap into the expertise of the 500 Durians team and portfolio.
In fact, in 2017, we became the first Silicon Valley VC to invest in a Cambodian startup called Khmerload.
Kr: Compared to other Southeast Asian countries like Indonesia, Singapore, or Vietnam, Cambodian startups don’t receive as much attention. What are some unique qualities and challenges of Cambodia’s tech ecosystem?
CT: 500 Startups doesn’t shy away from investing in markets overlooked by other investors. We aim to back the best companies, regardless of geography. Even four years ago, it was clear that Cambodia was rapidly digitizing with growing internet access, as well as widespread smartphone and social media use.
Cambodia had one of the fastest-growing economies in the world before COVID-19 hit. The government is clearly committed to fostering entrepreneurship in the long term, hence our partnership with Khmer Enterprise.
The goal now is to help attract and train tech talent by offering mentorship through best-in-class entrepreneurship programs.
Kr: Partnerships between VCs and government institutions are still rare in Southeast Asia, as most VCs prefer to run their own programs. Should there be more partnerships like Angkor 500? How do the involved parties all benefit from the program?
CT: Building long-lasting partnerships with governments, corporations, and institutions is integral to 500’s mission. We work closely with our partners to help them unlock innovation and access new economies through entrepreneurship, early-stage investing, and much more.
One example in Southeast Asia is our partnership with Enterprise Singapore. It is a really fantastic set of two programs, Global Launch Singapore and Global Launch San Francisco. One helps early-stage startups based in Singapore to enter the US market, while the other program facilitates the expansion of growth-stage companies worldwide into Southeast Asia. We’re already on our second batch.
So yes, there should definitely be more partnerships between the public and the private sector, especially in underserved markets. Venture capitalists are able to better support startups when governments act as partners. Startups benefit from partnerships in the form of training and mentorship, while allowing governments to keep up with innovation and promote research and development.
As the Cambodian government strives to make the country’s startup community more competitive and innovative, Angkor 500 will serve as a gateway for tech founders as they look to scale regionally. The potential for change and growth is huge when investors and governments work together.
Kr: Sectors such as logistics, e-commerce, and entertainment hold a promising future, along with nascent ones like edtech and healthtech. What is 500 Startups investment strategy for 2021?
CT: It became fairly clear during the first months of the pandemic that some sectors were going to be impacted and some were going to benefit by experiencing accelerated growth. We will continue to invest in the sectors you mentioned—productivity and software-as-a-service (SaaS) tools, where we’ve already had success in companies like Talkdesk and GitLab; in health tech, where we have investments in companies such as Carbon Health and Siren Care; and in edtech, where we were early investors in ApplyBoard and Udemy.
Kr: Southeast Asian startups also have received significant investments from US tech giants. Do you think we are going to see more investment coming from the US, especially in early and growth-stage startups?
CT: Despite the pandemic, the Southeast Asian startup ecosystem has proven its resilience. The recent fundraising success of unicorns such as Grab, Carousell, and Bukalapak [all 500 Startups portfolio companies] should send a signal to investors worldwide that the region’s startup ecosystem has come a long way in a short period of time. We have seen more and more investors around the world actively seeking to increase their exposure to Southeast Asia, and that trend will only accelerate.