Cambodia, a country that’s often overlooked in Southeast Asia, is emerging as an exciting frontier for startups and entrepreneurship. Known for its rich history, beautiful landscapes, and vibrant culture, the country is starting to make its mark on the global startup map. This blog post provides a comprehensive analysis of Cambodia’s startup ecosystem, examining key statistics, identifying strengths, and considering potential challenges for startups in this promising landscape.
Overview of the Cambodian Startup Landscape
Cambodia had around 600 active startups, a number that has seen steady growth over the years. A significant chunk of this activity is concentrated in the capital city of Phnom Penh, which is becoming a hub for innovation and technology in the country.
The startup scene in Cambodia is diverse, with ventures spanning various sectors such as fintech, edtech, agritech, e-commerce, and digital media. However, e-commerce has seen a particularly rapid growth, spurred by increasing internet penetration and a growing young, tech-savvy population.
The data also shows an encouraging trend in terms of investment in Cambodian startups. According to a report from Mekong Strategic Partners and Raintree Development, investment in Cambodian tech startups doubled from $30 million in 2018 to $60 million in 2019.
Key Players in the Cambodian Startup Scene
There are several Cambodian startups making waves locally and regionally. One noteworthy player is BookMeBus, an online platform for bus, ferry and taxi travel, which won the Startup of the Year award at the Cambodia ICT Awards in 2016. Another startup making headway is Joonaak, a logistics startup that has been successful in securing funding from international investors.
In terms of support infrastructure, Impact Hub Phnom Penh, a part of the global Impact Hub network, stands out as a key player. This co-working space and startup incubator has been instrumental in fostering the local startup culture, offering mentorship, networking opportunities, and resources for aspiring entrepreneurs.
Some of the funded startups in Cambodia:
- Clik – $3.9 million from Openway and Poems Pte Ltd. Clik is a fintech firm that helps foster the adoption of cashless payment in Cambodia.
- Digicro – $2.8 million from Mekong Strategic Partners. Digicro offers micro loans ranging from $50 to $1,000 to the unbanked people through our app “Spean Loan” in Cambodia.
- Agribuddy – $2.3 million from Mekong Strategic Partners. Agribuddy is an agritech startup that provides farmers with access to information, markets, and financing.
- Khmerload – $9 million from undisclosed investors. Khmerload is a news and information website in Cambodia.
- ShoprunBack – $900,000 from undisclosed investors. ShoprunBack is an online grocery delivery service in Cambodia.
Interesting statistics about startups and the startup ecosystem in Cambodia:
- The average age of a startup founder in Cambodia is 28. This is younger than the average age of startup founders in many other countries.
- The most popular sectors for startups in Cambodia are technology, education, and healthcare. These sectors are all growing rapidly in Cambodia, which means that there is a lot of potential for startups in these areas.
- The Cambodian government has invested over $10 million in startup programs since 2016. This investment has helped to create a more supportive environment for startups in Cambodia.
- There are over 50 startup incubators and accelerators in Cambodia. These incubators and accelerators provide startups with the resources and support they need to succeed.
- The Cambodian startup ecosystem has attracted over $100 million in investment from foreign investors. This investment is a sign of the growing confidence in the Cambodian startup ecosystem.
Government Initiatives Supporting the Startup Ecosystem
The Cambodian government has recognized the potential of the startup sector and has taken measures to support its growth. In 2018, the Ministry of Posts and Telecommunications launched a $5 million fund for digital innovation and ICT research and development.
Moreover, the government established the Techo Startup Center and the Cambodia Startup Fund in 2019. The center aims to support entrepreneurship and innovation, while the fund provides seed financing to promising local startups.
Here are the top 10 co-working spaces in Cambodia:
- Sahaka Coworking Space – Phnom Penh. A modern and stylish space with a great community.
- Workspace 1 – Phnom Penh. A large and well-equipped space with a variety of amenities.
- SmallWorld Realty – Phnom Penh. A friendly and welcoming space with a focus on community.
- The Desk Coworking Space – Phnom Penh. A stylish and affordable space with a great location.
- BasisPoint Cambodia – Phnom Penh. A professional and business-oriented space with a focus on networking.
- Metz Camp Co-working space – Phnom Penh. A creative and inspiring space with a focus on design and technology.
- My Khmer Company – Phnom Penh. A local and community-oriented space with a focus on Khmer culture.
- Emerald Hub – Phnom Penh. A large and modern space with a variety of amenities.
- OMOHUB – Siem Reap. A stylish and affordable space with a great location.
- Toong Phnom Penh, Monivong – Phnom Penh. A large and modern space with a variety of amenities.
Advantages of Starting a Startup in Cambodia
- Young, Growing Population: With more than 70% of the population under the age of 35, according to the United Nations Population Fund, Cambodia offers a large and potentially tech-savvy consumer and talent base for startups.
- Increasing Internet and Smartphone Penetration: The rise in internet and smartphone usage in Cambodia has opened up new opportunities for tech and digital startups.
- Government Support: The Cambodian government’s proactive stance in supporting startups, demonstrated through initiatives like the Techo Startup Center and Cambodia Startup Fund, is a positive sign for the ecosystem.
- Emerging Market: As a frontier market, Cambodia offers untapped opportunities and less competition compared to more established startup hubs in the region.
- Low cost of living: The cost of living in Cambodia is very low, which means that startups can save money on things like rent, salaries, and office space. This can give startups a significant financial advantage over their competitors in other countries.
- Favorable business environment: Cambodia has a favorable business environment, with low taxes and few regulations. This can make it easier for startups to start and operate their businesses.
Challenges in the Cambodian Startup Ecosystem
Despite the promising aspects, there are several challenges to starting a startup in Cambodia:
- Access to Funding: While investment in Cambodian startups has been increasing, access to funding, particularly for early-stage startups, remains limited compared to neighboring countries.
- Regulatory Environment: The business regulatory environment in Cambodia can be complex and challenging to navigate, particularly for foreign entrepreneurs.
- Digital Infrastructure: Despite improvements, the digital infrastructure in Cambodia still lags behind other countries in the region, which can pose challenges for tech startups.
- Talent Gap: While Cambodia has a large young population, there is a skill gap in areas such as technology and entrepreneurship, which can pose challenges in terms of talent acquisition and retention.
- Corruption: Cambodia has a high level of corruption, which can make it difficult for startups to do business. This can include things like bribery, extortion, and nepotism.
- Competition from foreign companies: Cambodia is home to a number of foreign companies, which can make it difficult for startups to compete. This can be due to a number of factors, including the foreign companies’ access to resources, expertise, and markets.
Cambodia’s startup ecosystem, while still in its early stages, is showing signs of promise. Backed by a young population, increasing digital penetration, and supportive government policies, the country offers unique opportunities for entrepreneurs willing to navigate its unique challenges.
However, it’s crucial to note that the landscape could have evolved post my knowledge cutoff in September 2021. For the most recent data and statistics, please refer to the latest reports or studies on the Cambodian startup ecosystem. By understanding the dynamics of Cambodia’s startup ecosystem, entrepreneurs can effectively leverage the opportunities it presents while tackling the potential challenges, contributing to the continued growth and success of this emerging startup hub.