Tech Startups in Cambodia are Growing

A report by Asian Development Bank reveals that the country’s tech startup scene is expanding but a lack of skills in the sector are preventing the sector from achieving real growth.
Tech startups have increased from less than 50 in 2013 to as many as 300 by 2018. Kiripost/via ADB
Tech startups have increased from less than 50 in 2013 to as many as 300 by 2018. Kiripost/via ADB

Cambodia’s technology-based startups have grown rapidly in recent years, aided by a support ecosystem boosted by policies and infrastructure geared towards their development, according to a report released on Thursday by the Asian Development Bank (ADB).

Tech startups emerged in Cambodia in the early 2010s, according to the ADB report, which added they have increased from less than 50 in 2013 to as many as 300 by 2018. The report said the exact number is hard to verify as new startups are constantly emerging while others fail and go out of business.

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The report, ‘Cambodia’s Ecosystem for Technology Startups’, said by the end of 2021, there were 90 startups registered with the Startup Cambodia National Program. One major incubator noted 150 active members.

Another source suggested about 150 startups that completed Impact Hub programs were still in operation. Most tech startups are involved in fintech, followed by media and advertising, e-commerce, development services, and digital marketplaces.

Programs, including Khmer Enterprise and the Startup Cambodia National Program, have emerged to help startups in areas such as digital platforms, seed funding, and research.

Many nongovernment organizations (NGOs) also actively support the tech startup ecosystem through mechanisms such as coworking spaces, incubation and acceleration programs, mentorships, and events that expose startups to domestic and international markets.

By the end of 2021, there were about 30 coworking spaces in operation and around 30 incubators and accelerators run by the government, developmental partners, and the private sector.

In addition, financing is provided by about 20 angel investors, venture capital firms, private equity firms, and crowdfunding platforms.

“Although remarkable progress has been made in building the ecosystem, there is limited attention and support focused on the greentech, agritech, healthtech, and edtech areas,” the report said.

“Cambodia has many higher education institutions, but the number of graduates in science, technology, engineering, and mathematics, as well as in health science, agriculture, and extractive and natural sciences remains relatively low,” it added.

The result is a shortage of tech talent. Cambodia has reportedly about 50,000 digitally talented people in the information and communication technology sector, but digital skills are reportedly only moderate and not specialized.

The report said startups encounter many challenges such as limited business and technical skills of their founders, inadequate networks, and lack of information about what the ecosystem can provide and what other players exist.

Other challenges include tax compliance, inadequate financing, high staff turnover, and weak markets due to the low digital literacy of potential customers, the report said.

The report said there are many opportunities to grow startups given Cambodia’s large youth population and the interest from government and other stakeholders. However, constraints for growth remain.

“To strengthen the ecosystem and promote startups to scale up, a startup policy or road map might be beneficial. Furthermore, there is a need to increase and attract tech talent, promote positive role models, and increase the number of mentors and the quality of mentorship,” it said.