Thailand emerges as AI and health tech innovation hub

Venture capitalists are intensifying their focus on investment opportunities in startups centred around artificial intelligence (AI), transformative digital healthcare, and the burgeoning pink technology sector.

According to industry experts, Thailand’s robust healthcare, agriculture, and tourism industries, coupled with local companies’ consistent investment in innovation, position the country as a formidable launchpad for startups.

Major firms are propelling innovation by investing in technology, creating a vibrant ecosystem with practical applications and a high demand for advanced solutions.

Andrew Ng, Managing General Partner of AI Fund and a globally renowned AI pioneer, highlighted significant opportunities for AI applications in Thailand’s tourism, healthcare, and agriculture sectors.

“I strongly believe Thailand is a great place for AI applications by leveraging the country’s unique strengths.”

Ng added that the momentum of AI and startup ecosystems in Thailand is bolstered by the movement of developers and projects from large companies.

Startup opportunities

AI Fund has partnered with KX Venture Capital (KXVC) to identify new startup opportunities, aiming to serve both the Thai and global markets. KXVC is the venture capital arm of Kasikorn Business-Technology Group (KBTG).

Ng expressed the fund’s interest in collaborating with various businesses to address industry pain points through AI. The fund supports startups by starting with an initial idea, followed by market and technical validation, recruiting a strong chief executive, engaging deeply with customers to refine concepts, and building a product prototype. If the prototype shows promise, the fund will provide capital to fuel pre-seed growth.

KBTG group chairman, Ruangroj Poonpol, remarked on the pervasive impact of AI in everyday life and the active adoption of this technology by businesses.

“2030 is predicted to be a pivotal year for AI-driven economic revolution.”

Ruangroj added that domain-specific AI is expected to dominate various industries. The economic impact of AI is anticipated to be monumental, contributing an estimated US$15.7 trillion to global GDP, with Asia potentially experiencing a US$1 trillion boost.

Ruangroj also said Thailand is well-positioned to become a leader in generative AI (GenAI). Both public and private sectors in Thailand demonstrate strong interest and early adoption of GenAI technologies, creating unique opportunities for local companies.

Health tech boom

“The healthcare industry, with its global worth exceeding US$9 trillion, stands as a colossal market poised for even greater significance in the years to come.”

The first group of co-investment partners in Disrupt Health Impact Fund includes Digital Health Ventures (DHV), the innovation and venture arm of Samitivej Hospital Group, Thana Asset Co Ltd, Saha Pathana Inter-Holding Public Co Ltd, and Sripatum University.

Thailand’s healthcare sector is experiencing a surge of innovation through AI, deep tech, and biotech. These technologies are revolutionising healthcare by making it smarter and more efficient, challenging human biological limitations, and solving complex issues with scientific advancements.

Ruangroj noted the high growth in global health tech, especially among people over 65 years old.

“Mega trends are reshaping healthcare, which will bring tremendously lucrative opportunities in the next decade.”

By 2031, the global digital health sector is predicted to reach US$275 billion, preventive care US$415 billion, self-care US$26.5 billion, and holistic wellness US$8.47 trillion by 2027.

Health tech funding

Ruangroj also mentioned that the health tech sector has high entry barriers for newcomers. CB Insights reported that global digital health tech funding grew 48% on a quarterly basis in the first quarter of this year, driven by large funding rounds directed at biotech startups and AI-leveraging players.

Jantanarak Tuekaew, managing director of Disrupt Technology Venture Co, highlighted Thailand’s position as an Asian medical hub, supported by its strong health infrastructure of 1,300 public and private hospitals and affordable fees, which are 50-70% lower than in Western countries.

Jantanarak said their venture will invest in revenue-generating startups in pre-series A to B.

“We invest in the US, EU, Israel and Asia-Pacific, with a ticket size of $500,000-2 million, targeting investment in 10-15 companies in the healthcare field, both domestically and internationally, within the next three to five years.”

Sam Tansakul, Managing Director of Krungsri Finnovate reckons investment in startups slowed down due to the challenging world economy in the past two to three years.

“Venture capital firms will now look for profitable startups.”

Fundraising startups

In Thailand, most fundraising by local startups has taken place at the series A round, not at higher levels, Tansakul added. Finnovate has established a new fund, Finno Efra Fund, worth 1.3 billion baht, to invest in small startups in pre-series A, in partnership with EfraStructure and Krungsri Finnovate.

Apart from providing capital, the fund will offer accelerator programmes, mentors, and knowledge sharing to help early startups expand. Tansakul noted growth in MarTech startups, which create new tools to optimise marketing efforts and reduce costs, as well as in AI-powered services, environmental, social and governance firms, and industrial technology for manufacturing.

Tansakul also sees opportunities in the mobility area, particularly in the two-wheeled motorbike business, where Thais can import components for assembly and build faster bikes with higher capacities. IT outsourcing services are also attractive, addressing the shortage of skilled resources amid demand for digital transformation.

Fintech startups, while unable to compete with banks, still have opportunities in wealth management and payment businesses.

Korawad Chearavanont, executive chairman and founder of AI developer firm Amity Solutions, emphasised the need for talent to refine and train GenAI agents, suggesting that fostering the right skillsets could enable Thailand to play a significant role in AI application development.

Amity Solutions and its parent company, Amity Corporation, recently raised $60 million in a Series C funding round.

Pink economy

Thailand could become a “pinktech” hub, capitalising on untapped business opportunities from the LGBTQ community, according to Canvas Ventures Co Ltd, a multi-family venture capital office. Pinktech refers to technology and products tailored to the specific needs and interests of LGBTQIA2S+ members.

Tanachai Kulsomboonsin, co-founder of Canvas Ventures, acknowledged that Thailand has one of the largest LGBTQIA2S+ populations in Southeast Asia at around 7 million.

“Thailand’s Pink Economy is not just a niche, it’s a burgeoning market estimated to be worth billions of baht.”

The end of the “startup winter” is near, but many pinktech ventures remain focused on ideation rather than monetisation. This highlights a need for a shift from passion-driven projects to sustainable businesses.

Tanachai cited a survey conducted by Thammasat AI Centre and Canvas Ventures International, which found that 47.4% of respondents identify LGBTQIA2S+ as a substantial and eager consumer base. However, 80% of local pinktech startups are in the early stages, brimming with ideas but needing mentorship and funding to grow.

“Investors can play a crucial role by providing guidance on financial modelling and market validation.”

The unmet needs of this community represent a goldmine for innovative pinktech solutions. Despite investor interest, 88.9% have not yet invested in pinktech, according to the survey.

While Thailand’s government is open to supporting pinktech, specific policies such as tax incentives, funding for research, and streamlined licensing processes are lacking.

Corporate Thailand is increasingly embracing LGBTQIA2S+ inclusion, but deeper engagement is needed, said Tanachai.

“It’s not just about rainbow logos, it’s about understanding the unique needs and challenges of the community. This could lead to innovative products, services, and workplace policies that benefit both businesses and the LGBTQIA2S+ community.”