Cambodia Investment Review
Cambodia’s startup ecosystem is entering a new phase of growth and diversification, according to Startup Cambodia Insight 2024, a comprehensive report jointly produced by by Techo Startup Center and Startup Cambodia, which is the national program coordinated by Techo Startup Center.
The study, spoke with founders, investors, and ecosystem stakeholders, offers the most detailed snapshot yet of the opportunities and challenges facing Cambodia’s entrepreneurial sector in 2024 and beyond.
In a message accompanying the report, Dr. Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance, emphasized the strategic importance of fostering innovation, stating, “A strong startup ecosystem is key to unlocking Cambodia’s next stage of economic development, creating high-value jobs and positioning our country for regional competitiveness.”
Local Resilience and Diversification Lead 2024 Developments
The report highlights that Cambodian startups have displayed remarkable resilience despite a global downturn in venture funding. Entrepreneurs adapted to tighter capital markets by shifting toward sustainable, revenue-driven business models and exploring underserved domestic markets.
A major shift noted in the report is the increasing participation of Cambodian founders. In 2024, 53% of startups are locally founded, compared to 34% in previous years—a clear indication that entrepreneurship is becoming more deeply rooted within Cambodia’s own business community.
Sector-wise, while e-commerce and logistics remain dominant, emerging areas such as agritech, fintech, edtech, and healthtech are gaining momentum. Startups are also beginning to tailor their solutions more closely to local needs, including innovations in mobile payments, agricultural supply chain management, and digital education platforms for rural communities.
Phnom Penh continues to serve as the country’s primary innovation hub, accounting for 70% of startups. However, the report notes the emergence of smaller but increasingly vibrant startup scenes in Siem Reap, Battambang, and Kampot, particularly in industries linked to tourism, creative services, and agriculture.
Persistent Challenges: Funding Gaps and Talent Shortages
Despite the ecosystem’s growth, key barriers remain. Access to capital continues to constrain early-stage startups. The report found that only a small percentage of founders successfully secured seed or Series A investment, with many citing difficulties in meeting investor expectations around scalability and exit readiness.
Investor appetite is further dampened by structural issues, including the lack of a formal secondary market and limited acquisition opportunities, which together make Cambodia a higher-risk environment compared to neighboring markets like Vietnam or Thailand.
Talent development is another significant challenge. While Cambodia boasts a young and dynamic workforce, startups continue to struggle to recruit mid- and senior-level talent in engineering, business development, and product management. Founders cited the urgent need for technical training programs and better alignment between universities and the private sector to close these skill gaps.
Additionally, regulatory uncertainty and the slow rollout of digital infrastructure outside urban centers remain barriers to scaling startups nationally.
Future Outlook: Building for Sustainable Growth
Looking ahead, Startup Cambodia Insight 2024 projects cautious optimism for the sector, provided that strategic investments are made in the ecosystem’s foundations.
Several positive trends support this outlook. Government initiatives such as the Cambodia Digital Economy and Society Policy 2021–2035, as well as programs led by Khmer Enterprise and other development partners, are fostering an environment more supportive of startup growth. Regional accelerators and venture capital funds are also showing increasing interest in Cambodia, recognizing its potential as an emerging innovation hub in ASEAN.
The report recommends targeted actions across three priority areas:
- Talent development: Deepening technical education programs and promoting startup career pathways among young professionals.
- Investor-readiness: Training startups to meet the expectations of regional and international investors, focusing on scalability, governance, and financial management.
- Market access: Strengthening links with ASEAN markets to help startups expand regionally from an early stage.
It also identifies key opportunity sectors for Cambodia’s next wave of startups: agritech, fintech for financial inclusion, edtech for rural education, and climate tech solutions adapted for emerging market contexts.
With a solid foundation now in place and growing momentum across multiple fronts, Cambodia’s startup community is well-positioned to move from resilience to regional relevance over the next five years.
