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Thai wealth-tech sector receives first investment

A corporate venture capital arm a major bank in Thailand has reportedly announced that it has made its first investment in the emerging wealth management technology (wealth-tech) sector by leading a US$6.5 million investment round of pre-series A funding in a company that provides stock analysis and investing resources.

The investment round marks the biggest pre-series A funding for a Thai startup to date.

The Managing Director of the investing firm stated that the wealth-tech company has the potential to become the country’s first unicorn because of its unique, proprietary core-technology that can be scaled globally, and its services are directed at the financial industry, which is a huge market globally.

It was noted that globally, more than 50 per cent of total venture capital is invested in fintech startups compared to less than 10 per cent in Thailand, as there are fewer fintech startups here. The wealth-tech firm is the first wealth-tech startup for the venture capital arm and for the country.

The US$6.5 million funding round will help promote innovation in the country’s wealth-tech industry and prepare the company for global expansion.

The VC firm will support the wealth-tech firm which will be expanding its services in Thailand and abroad, enabling broader access to the wealth-tech firm’s simple investment solutions.

The VC company sees a lot of growth potential for wealth-management technology, or wealth-tech, as it plays an increasingly important role amid the low-interest rates.

The wealth-tech firm has exhibited a capability to develop such technology, with its proprietary stock-analysis algorithm that’s been proven to help investors beat the market in the long run, as well as a steadily growing user base.”

Beacon VC has invested in five startups in Thailand and overseas. The firm focuses on investing in high-potential startups that can deliver value to KBank’s customers or can contribute to the bank’s business expansion. It has $135 million in funds and has invested in several technology startups such as FlowAccount in Thailand, and Grab and InstaReM in Singapore.

The funds will be used to raise its innovative capabilities and become a leading wealth-tech company as well as expand its team of software engineers and other experts in technology and marketing.

The funds will also be used to conduct research and development on ‘deep technology’, which includes artificial intelligence (AI) and data mining while expanding service overseas in countries such as Singapore and India.

The aim is to make accessible the stock-analysis data for 95 per cent of the world’s stocks from 16 territories.

The wealth-tech firm’s tech includes a fundamental analysis platform covering stock markets in 16 countries with over 200,000 users in 128 countries, and an automated stock investment platform that uses the firm’s own ranking strategy to deliver higher returns at lower fees and risks.

The funding will help the wealth-tech firm enable the manifestation of some of the goals laid out in Thailand’s Digital Economy Policy.

According to a publication, the framework for digital economy development was proposed with the vision that the digital economy will enable growth in economic, business, social, and governmental sectors within Thailand, with major policy goals including:

  • Establishing digital infrastructure with enough capacity and coverage to support seamless service delivery;
  • Using digital technology as a tool to bring a better quality of life and equal access to public services of all citizens. (Digital Inclusion);
  • Promoting the growth of innovative businesses that utilize digital technology;
  • Building digital skills and transforming business practices so that Thai businesses– especially the SMEs– are positioned to compete successfully in the digital economy;
  • Increasing national GDP with a major contribution from digital industries;
  • Creating a digital business ecosystem that responds to the dynamics of the digital economy; and,
  • Significantly enhancing overall ICT readiness as assessed by global indices.

Thus, it is expected that the recent influx of funding for the wealth-tech company (and thereby, the sector as a whole) will result in a better quality of wealth management in Thailand.

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