Cambodia Investment Review
The 17th Give a Day featured the ADB Frontier team under the banner “Growth Lessons from Cambodia’s Most Dynamic Companies,” the event provided a unique blend of insights from key industry figures and offered an in-depth view into the facility’s investment strategy aimed at energizing Cambodia’s ‘gazelle’ companiesrapidly growing SMEs pivotal for the economy.
Adding another layer of depth to the event was a panel discussion featuring some of Cambodia’s most influential entrepreneurs. The panel offered invaluable perspectives on the triumphs and challenges of building successful businesses in Cambodia, making the event a comprehensive guide to the country’s entrepreneurial landscape.
Frontier-Market Gazelle Companies Are Starved for Risk Capital
Dominic Mellor, a team leader for the ADB Frontier Facility, delivered the keynote and shed light on the primary objective of ADB Frontier as a next-generation facility: investing in fast-growing gazelle Small and Medium-sized Enterprises (SMEs) in small frontier markets. “Frontier-market gazelle companies are starved for risk capital,” Mellor stated, emphasizing that sectors such as agrifood, light manufacturing, and tourism is particularly ripe for investment.
ADB Frontier seeks to crowd-in private capital, multinational companies, and specialized business expertise to propel these gazelle companies into regional supply chains. Mellor further elaborated that ADB Frontier investments would be deployed with a gender and climate lens. “Our initiative aims to catalyze new industries, bring about digital transformation, and drive employment and economic growth,” he added.
Highlighting ADB Frontier’s recent efforts, Mellor shared news of a pilot Seed Program launched in May 2023 in Cambodia and Lao PDR. He detailed that the program is designed to offer investment-readiness funding to help recipient companies scale their operations and secure new investments. “With funding sizes ranging between $50,000 and $200,000, our Seed Program is designed to set these companies on a fast track to growth,” Mellor remarked.
Investing Between $500k to $2m In Top Participants
The Seed Program is considered a steppingstone for a larger Impact-first Investment Fund targeted to commence operations in 2024. According to Mellor, this fund will invest between $500,000 to $2 million in top-performing Seed Program participants in Cambodia and Lao PDR, using a mix of equity, debt, and other innovative investment products.
ADB Frontier is also broadening its horizons by conducting a market study in Fiji and the Pacific, eyeing expansion opportunities in other small frontier markets. On the governance side, ADB Frontiers fund Investment Committee comprises industry experts with substantial experience in investing in companies in frontier markets. “Our transactions benefit from ADBs stringent integrity due diligence and environmental and social safeguards,” Mellor assured.
ADB Frontier is poised to leverage the Asian Development Bank’s extensive regional infrastructure, including its resident missions in small frontier markets. Mellor highlighted that the facility would tap into the Banks comprehensive knowledge base and market insights to steer its investment strategy.
Utilizing International Experiences in A Local Context
The panel discussion was moderated by ADB Frontier team leader Tean Ly and featured some of Cambodia’s most influential entrepreneurs and provided crucial insights into the countrys growing business landscape. The panel included Chan Sopheak, CEO of Angkor Green; Chang Bunleang, Co-founder of Brown Coffee; and Chy Sila, Co-founder of Kirisu Farm.
Chan Sopheak, the force behind Angkor Green since its inception in 2011, reflected on the challenges of establishing a homegrown agricultural solution in Cambodia. We realized early on that most of the training provided to farmers came with the intention of selling products. Angkor Green was developed to genuinely support and train farmers in effective growing techniques,” Chan stated. The company has been instrumental in increasing agricultural yields through specialized training, relying mainly on university students and partnerships for capacity building.
Chang Bunleang shared the story of Brown Coffees evolution from a small café into a corporate brand. We noticed a void in the market for quality coffee shops. My co-founders and I had the right skill setspastry chef, architect, and manager. Listening to customer feedback helped us curate a menu that resonates with our customer base, said Chang. He emphasized the hands-on training approach to skill-building, notably in espresso and latte art creation.
Chy Sila, a serial entrepreneur, spoke about Kirisu Farm, Cambodias first large-scale, high-tech dairy farm. “My trip to Israel in 2009 inspired me to replicate their farming methods in Cambodia. We had to create an entire ecosystem; from feed management to cow health monitoring using data and dashboards,” Chy explained. The farm employs technology and Artificial Intelligence, collaborating with Israeli experts for knowledge transfer.
Human Resources Remain Key Challenge in Cambodia
All three entrepreneurs discussed the challenges of staffing in emerging markets like Cambodia. While Angkor Green built the capacity of local agroeconomists, Brown Coffee set up an in-house training program. Kirisu Farm, on the other hand, required workers skilled in technology and machinery operation, thus leveraging Israeli expertise.
On the topic of market competition, each entrepreneur had unique strategies. “We had to compete against imported dairy products. So, quality and price were key, Kirisu’s Sila mentioned. Brown Coffee’s Bunleang emphasized customer feedback and localization. Angkor Greens Sopheak said, “We differentiated ourselves by developing specific products for different crops and stages. We even initiated field demos to prove the effectiveness of our solutions.
Discussing innovation, all three pointed to significant strides. “We’re thinking of introducing locally flavored milk, but expertise is lacking,” said Sila. Brown Coffee is experimenting with different milk options and even contemplating collaboration with Kirisu. Angkor Green, meanwhile, has already introduced Angkor Sprayer, a labor-saving, efficient agricultural sprayer, successfully exported to Thailand.
Startups Should Launch Lean and Be Wary Of Quick Money
The entrepreneurs also spoke about the ecosystem supporting business growth. While Angkor Green has been trying to export since 2018, working on achieving technical specifications and overcoming banking challenges, Kirisu Farm and Brown Coffee cited the lack of reliable data and investor interest as obstacles.
Asked for their key advice to aspiring entrepreneurs, the consensus seemed to focus on starting lean and being wary of quick money. “Your reality will be different from planning,” noted Bunleang. Sopheak of Angkor Green added, “Associate with people who complement your strengths but share your common goal.”
Give a Day has quickly become a go-to event for Cambodia’s entrepreneurial community. From a humble start in 2021, it gained real traction in 2022, drawing over 300 Entrepreneurial Support Organizations (ESOs) to its 10 events. The feedback speaks for itselfnearly everyone found it a great place to network and learn, and a vast majority felt it positively impacted their work.
This year, Khmer Enterprise and Swisscontact are taking the reins, aiming to build on that success. They plan to strengthen the entrepreneurial scene by fostering deeper, trust-based relationships among its key players. With high-profile interest from groups like ADB Frontier, Give a Day is setting the pace for how to energize frontier markets through smart investments and collaborations.
