Cambodia is a country where around 50% of the population is below 25 years, there is a strong self-employment tradition and the mobile penetration is growing. All of these factors shape a growing, new and young startup ecosystem in Cambodia.
With Geeks in Cambodia, Osja, Archub, Angkor Hub and SmallWorld we could understand and see first hand the role of startups and entrepreneurial mindset in the development of Cambodia. In the video we summarize the main ideas we learnt:
Startup Ecosystem in Cambodia
We have found a more organized and more structured startup scene than we expected, although there are still things to do. Making an analogy, it could be said that Cambodia is in first grade in terms of startups. But it is a fast growing economy, and it is learning from his neighbor countries.
Digital, Mobile and Social Population
As we have said in previous posts, one thing that characterizes the population in Southeast Asia is the “leap frog” in terms of tech generations.
Though mobile penetration is not as high as in Vietnam, the Cambodian entrepreneurs we talked to agree that mobile is growing. Taking into account that approximately 50% of the population is below 25 years, we think that many of them still do not have their own smartphone, but they use the one owned by the adults around them. For example, Ear Uy from Osja Studio told us that they are considering to enter in kids games.
On the one hand, the Cambodian population use intensively Facebook as the main social platform to ask for recommendations and social opinion on what and where to buy.
On the other hand, the consumer is not prepared to buy online (yet). Ecommerce still has challenges ahead, such as improving logistics and online payment methods. In fact there is no one is leading and promoting mobile payments in Cambodia. The FinTech industry has a growth potential in the country, especially regarding small and medium businesses as well as online payments.
Setting up a business
Jeff Laflamme from AngkorHub told us how much has evolved the paper work for starting a business. Few years ago it was not easy, but nowadays in 45 minutes you can have your company registered. Unless in other countries in the region in Cambodia you can own 100% of the company, no needing a local partner. A strong point in favor to Cambodia.
In addition, the tax level is low. A small business is taxed at 10% and, in certain areas, there are tax advantages if you create employment, such as tax exemption for some years.
Governmental and International Support
Some programs inspiring the entrepreneurial ecosystem in Cambodia:
- Ministry of Commerce Incubation 101
- Mekong Business Initiative
- Development Innovation
The country is promoting networking with private investors. Rithy from SmallWorld told us that even they are already working to form “Angel Investment Pools”.
Mention some funding sources that are already in the country: Insitor Impact Fund and Uberis Capital, among others.
Cities to based startups in Cambodia
The startups ecosystem in Cambodia is mainly concentrated in two cities: Phnom Penh and Siem Reap.
In the capital, Phnom Penh, is concentrated most of the economic and commercial activity is concentrated, which makes it the perfect hub for entrepreneurs, mostly local.
By contrast, Siem Reap, the tourist capital from Angkor Wat, is a common destination for Digital Nomads and foreign entrepreneurs, mainly who are passing through or looking for a city with a low cash burn rate to boot their idea.
Cambodia: inside and outside the country
To understand the future of the startup ecosystem in Cambodia it is necessary to think in two dimensions: internal and external.
The interest of young people to be entrepreneurs is growing, which will mean a boost for the Cambodian economy. These young people are focusing mainly on responding to the country needs.
But Cambodia startups must thought also in a global role. Unlike its neighbor Vietnam, Cambodia does not have a large local market: 15 million people compared with 94 million Vietnamese. So part of its growth happens to have a global plan, as Ki Chong Tran from ArcHub told to us.
Conclusions of 2 geeks in Cambodia
In addition to what we have already been discussing throughout the post, after almost 3 weeks we spent in Cambodia, we see that it is a country that is taking a run: he has managed to follow the Thai and Vietnamese lead. We are surprised by their ability to recover, or apparently recover from his closest history.
It is a country that offers opportunities for both local and foreign entrepreneurs, and they have a good base for the development of the entrepreneurial, digital and technology industry. However, as it is a chance it is also a risk. Many sectors related to this industry still do not have a strong tradition in the country, neither a leading player who promotes it, as for example, in the mobile payments industry.