Cambodia Investment Review
In episode 105 Rising Giants podcast hosts Max Thornton and Dom Kalousek sat down with Christophe Forsinetti, a veteran investor with over 18 years of experience in emerging markets to discuss Cambodia’s startup ecosystem, the challenges for investors, and the future prospects of venture capital in the Kingdom. Founder of OBOR Capital and Investment Director at Leap Philanthropy, Forsinetti has been deeply involved in Cambodia’s business scene since the early 2010s.
Forsinetti shared that his early upbringing in Africa and other developing nations during the 1980s had a lasting impact on his career. After leaving Africa due to the war, he relocated to France at age 14 for his education and later worked in Europe. “What drove me towards frontier markets was my early upbringing in Least Developed Countries. The startup world introduced me to so much innovation and limitless ambition at a young age in my career,” he said. He also highlighted the importance of cross-cultural experiences, citing his work in Mexico and his exposure to American and European styles of business.
Reflecting on Cambodia’s venture capital environment 15 years ago, Forsinetti mentioned how he initially aimed to set up a large investment fund but soon realized the ground realities. “You normally have to be on the ground yourself; while entrepreneurs here are good, there is very little in terms of company compliance and procedures,” he said. Today, he acknowledges that the ecosystem has evolved but contends that it is still in an early stage, especially compared to other countries like Thailand, Vietnam, and Indonesia.
Building a Robust Ecosystem
When asked about what Cambodia needs to become a more favorable investment destination, Forsinetti emphasized, “It’s all about building the ecosystem with a life cycle of companies, proper education, and raising awareness. The current tax and legal frameworks are still a bit weak, and there are financing issues that need to be addressed to further the ecosystem.”
Discussing his approach at OBOR Capital, Forsinetti stated that they are still in a “test and learn” mindset. “You need to be a hands-on investor in Cambodia and help provide services that companies don’t have the internal resources for,” he explained. OBOR Capital has shown a full investment cycle from investing to exit, but Forsinetti highlighted that the process took a significant amount of time and effort for relatively small returns.
Forsinetti elaborated on OBOR’s investment in companies like KWSH, Camboticket, ShopRunBack, DeliShop, GAEA, and Animal Doctors International. “In Cambodia, it’s important to know the people and the sector of the company you are investing in,” he explained. He added that understanding the Cambodian market and its largely rural demographic was crucial, citing that good businesses in their portfolio had strong execution and understood the local market needs.
On the issue of talent acquisition for startups, Forsinetti advised, “You do not need to reinvent the wheel; poach someone from one of the leading firms who has done it before.” He noted that while many entrepreneurs are intelligent and ambitious, their lack of structure and ability to bring in the right people often leads to failure.
Future Outlook For VC in Cambodia
Forsinetti remains optimistic about Cambodia’s long-term venture capital space despite a current economic slowdown. “We are starting from a very low base, so we can only go up. My long-term view for Cambodia is extremely good; the fundamentals are there,” he said. OBOR Capital aims to continue providing financing to Cambodia’s best SMEs and support them through consulting based on their 15-year experience in the market.
Read more: OBOR Capital aims to improve Cambodian SMEs financial management skills
When it comes to sectors of interest for investment, Forsinetti mentioned finance supply chains and finance inclusion as well as infrastructure, energy, and water. He also touched upon the necessity for Cambodia to adapt to global trends, such as climate change and carbon emission trading schemes.
Forsinetti shared some of his basic daily habits that included list making and task prioritization, emphasizing the importance of maintaining a work-life balance and staying healthy. Among the books that have influenced him, he cited “The New Cold War” for its historical perspectives and future scenarios on US / China relations. He added business owners must understand the forthcoming three D’s of digitalizing, de-carbonizing and de-coupling
In closing, Forsinetti left us with a piece of wisdom that has guided him: “Stop your Excel models if you can’t use a pen and paper with three numbers to make your business model work, it won’t.”
The interview offered deep insights into the investment dynamics in Cambodia and Christophe Forsinetti’s extensive experience makes him a voice worth listening to in the evolving narrative of Cambodia’s venture capital landscape.
