Cambodia Investment Review

Unpacking Cambodia’s Startup & Venture Capital Ecosystem: Insights from ANGKOR 500

Unpacking Cambodia’s Startup & Venture Capital Ecosystem: Insights from ANGKOR 500

Cambodia Investment Review

A panel discussion featuring industry experts and venture capitalists offered a deep dive into the nuances of Cambodia’s growing startup ecosystem and the changing investment landscape. Under the ANGKOR 500 initiative designed to foster entrepreneurship in Cambodia through a series of programs was hosted in collaboration between Global 500 and Khmer Enterprise, the discussion provided invaluable insights for entrepreneurs, investors, and stakeholders in the Cambodian startup arena.

The panelists, including Bora Kem – Mekong Strategic Capital, Jaspreet Singh – Global 5 Venture Capital, Tomas Pokorny – Eurocham Digital and Technology Committee, weighed in on critical aspects such as pitch quality, emerging sectors for investment, and the role of technology and sustainability in attracting venture capital.

Lessons From Cambodian Startups Pitching To VC

The panel was moderated by Ee Ling Lim, Executive Director of Market Launch at 500 Global, who opened the session with a query about the best and worst pitches the panelists had heard.

Ee Ling Lim – Executive Director of Market Launch at 500 Global

Bora Kem responded by stating that although his venture capital fund had attended numerous pitching events, they had never actually invested in a startup solely based on its pitch. He highlighted the importance of authenticity and earnestness in a pitch, warning that false or exaggerated claims could undermine the credibility of not just the startup but the entire investment ecosystem. According to Bora, the essence of pitching events is not necessarily to secure immediate funding but to establish valuable connections and to get a critical evaluation of one’s business model.

Read more: AVPN Hosts Inaugural Impact Investment Roundtable 2023: Building a Collaborative Ecosystem for Social Impact in Cambodia

Jaspreet echoed Bora’s thoughts on pitching, emphasizing the importance of integrating a compelling story into the pitch to capture and sustain investor interest. The real value of a pitch, he elaborated, was to kick-start a relationship with potential investors and begin a lengthy process that could eventually lead to investment. Tomas Pokorny, another panelist, added that the appeal of a pitch increased substantially when the product or service on offer could excite him as a consumer, not just as an investor. He also stressed the importance of a humble founding team in attracting venture capital interest.

Ee Ling Lim then steered the conversation towards the changing landscape of venture capital investment. She posed two questions to the panel: the ease or difficulty in securing investment nowadays and the sectors currently attracting the most investment.

Bora Kem – Mekong Strategic Capital.

Tomas Pokorny reflected on the hype surrounding buzzwords like AI and blockchain. He cautioned startups against merely riding the trend wave without genuinely integrating these technologies into their business models. He added that such technologies, if used to automate, innovate, and increase productivity, could be particularly impactful in sectors like manufacturing and agriculture, thereby contributing positively to Cambodia’s economy.

Jaspreet agreed but offered a caveat. He noted that many startups were confusing features with benefits, warning them to be discerning about the actual utility of trending technologies. Jaspreet added that from an investment perspective, he found startups with a Business-to-Business (B2B) component and a sustainability focus particularly attractive.

Investment Trends in Cambodia Have Experienced a Paradigm Shift

The conversation then veered into the area of climate technology and sustainability. Jaspreet noted that most of the innovations in climate tech were emanating from Europe, where regulatory measures were more robust. In contrast, the Cambodian market was lagging in its focus on sustainability due to a consumer preference for cheaper and faster products.

Jaspreet Singh – Global 5 Venture Capital.

Bora Kem observed that investment trends in Cambodia have experienced a paradigm shift. Where once mobile fintech was the hot investment sector, the focus had shifted to impact investments like healthcare, education, agriculture, and sustainability. He reminded the audience that buzzwords like AI are merely tools that could be beneficial if used strategically in long-term business plans.

Read more: Op-Ed – A Peak Into Cambodia’s Startup Ecosystem

Ee Ling Lim brought the discussion back to the challenges of fundraising. Jaspreet cautioned against relying on venture debt as it could jeopardize the entire business in case of default. Tomas Pokorny reflected that the bar for investment had been raised; investors now looked for proven revenue streams and customer traction, not just ideas. Bora suggested that angel investing and grants from development programs like Swisscontact and Khmer Enterprise could serve as viable alternative funding routes in the current economic scenario.

Tomas Pokorny – Eurocham Digital and Technology Committee.

The final segments of the discussion revolved around the scalability and competitiveness of Cambodian startups. Bora Kem posited that Cambodia’s comparatively relaxed business regulations and increasing internet penetration in rural areas make it an ideal testing ground for startups aiming for global markets. Jaspreet reinforced the sentiment, stating that Cambodian startups were competitive due to their ground-up understanding of local markets.

Tomas Pokorny concluded the panel by highlighting the role of government in fostering an innovation-friendly environment. He argued that Cambodia needed to work hard to attract investment, given the increased regulatory challenges and the reputation damage suffered in recent years. He expressed optimism that the government would undertake measures to create a more conducive environment for startups, thereby enabling them to scale globally.

The discussion served as a pivotal forum for stakeholders in Cambodia’s startup ecosystem, offering deep insights into what venture capitalists are seeking, how the investment landscape is evolving, and what startups need to consider for sustainable and scalable growth.

Angkor 500 – Khmer Enterprise and Global 500 Panel Discussion at Hyatt Regency Phnom Penh.

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