Thailand is a tough environment for seeding fledgling startups. Not only is there little on the ground in the way of angel investing, there is no easy way to connect Thai startups to tech-savvy backers in other parts of Southeast Asia or India. And vice-versa: there’s no bridge connecting Thai investors, including wealthy families, hunting for new startups to find them in places like India or Indonesia.
This is the gap that Ankit Upadhyay is trying to fill. He launched a seed investment firm in Bangkok in 2023, A2D Ventures. This year he launched a local accelerator, Venture Spark, also aimed at supporting Thai entrepreneurs.
Now he is partnering with We Founder Circle, a syndicate of angel investors in India, to help connect them with opportunities in Southeast Asia, to support startups’ expansion into India, and facilitate early-stage startup fundraising between and among the region’s emerging markets.
Misconnected
“There are not enough angel investors in Southeast Asia,” he told DigFin. “There are too few founders or early employees who have made an exit and can now support the ecosystem. Too few people who understand the asset class.”
Upadhyay learned this the hard way. Born in India but raised in San Francisco, where he advised enterprises on semiconductor business, he moved to consumer tech and saw an opportunity to grow major companies in Southeast Asia. He joined Sea Group and led the entry of its e-commerce business, Shopee, into India, in 2021.
The group ended up shutting the operation in the wake of macro turmoil as the US ended the decades-long era of ultra-low interest rates. But the experience gave Upadhyay a detailed understanding of tech startups in the region, and the limits of early-stage investing in fragmented markets where rich people tend to stick to backing friends and family, rather than support founders outside of their personal network.
He’d been angel-investing since 2009. He’d seen how such networks in the US, China and India could end up backing unicorns, but within Southeast Asia the barriers across markets were too high and the pool of talent and money in individual countries was too limited.
“There’s no regional answer to AngelList,” he said, citing the US software platform that connects startups, angel investors and limited partners.
Building bridges
But startups need to scale into becoming cross-border businesses. The region’s tech leaders, like Sea or Grab, are regional players. He set up A2D as a Southeast Asian platform for angel investors and founders to try to connect the dots.
Software isn’t enough: Upadhyay has leveraged his Indian network and hopscotched across the region to drum up interest among angel investors, family offices, and companies. So far he’s assembled investor syndicates backing 17 startups from Southeast Asia.
But A2D isn’t sufficient, so he and his Thai co-founders, Sivach Sornchaitanasuk and Ted Thetnaungsoe, set up Venture Spark.
“Thailand is missing some essentials,” Upadhyay said. One is the lack of a standalone Thai VC fund. There are plenty of corporate VCs but those bring a corporate strategic interest. Secondly the country has a reputation for being insular, which Upadhyay is not true but there is a need to do things “the Thai way”, in terms of language and networking with local families. Venture Spark is also open to both Thai and foreign founders, with an eye on digital nomads.
Venture Spark is wading into the Thai space to support local startups, some of which may win funding from A2D. It creates a funnel for the VC, but there are no exclusive deals. It has just launched its first cohort with 20 companies, with a demo day this week.
“Let’s see who gets funded,” Upadhyay said.
The India connection
The latest piece of the puzzle is the collaboration with We Founder Circle. This platform was founded in Mumbai in 2020 to aggregate global funding for Indian startups. It has so far funded more than 150 companies. It has a range of partnerships such as the one with A2D that funnel capital to India, but Upadhyay says his is the only partner dedicated to sourcing money and projects from Southeast Asia.
The relationship is as much about giving A2D credibility as it is about channeling money. It is meant to engender trust among Southeast Asian families and angel investors, to encourage them to back companies outside of their personal networks.
It’s also meant to be a two-way street. A2D has opened a rep office in Gift City, a special investment zone in Gujarat modeled after the Dubai International Financial Centre. Here, Indian investors can invest offshore in US dollars, and foreign investors can invest in India, also in US dollars.
“It’s very early,” Upadhyay said. “Let’s see if my cross-border hypothesis works.”
What kind of sectors are most likely to attract A2D backing – particularly within the fintech world?
Fintech opportunities
Upadhyay says the broad categories such as cross-border payments are now “solved” and over-crowded. Also, India is miles ahead when it comes to digital payments, so there is little interest from those investors in looking at Southeast Asian fintechs. (Upadhyay notes that in areas such as biotech and healthtech, Southeast Asia is far ahead of India.)
But he says there remain niche areas of fintech and insurtech that he wants to back.
“Embedded finance and lending is very attractive,” he said. There’s a huge demand for capital among SMEs and tech companies throughout the region, although the needs and uses vary among markets – which is what creates opportunity.
“How niche can you get?” he said, saying young fintechs have an opportunity to cater to specific segments, such as gig-economy workers, supply-chain companies in construction, or local restaurants and bars. They all need lending and B2B financial services, often customized for their local customer patterns.
For example, cafes see a decline in demand near the end of paycheck periods, so Upadhyay thinks variations of the buy-now, pay-later model can work. Advances in AI to score credit risk continues to make such financial models more feasible and attractive. AI is also making it possible to personalize digital insurance products, to help insurers move away from monolithic and expensive products and start to cater more to underserved customers.
