SET boosts Thai startups with new blockchain-based platform

By: The WFE Focus Team May 2018

Kesara Manchusree, President of the Stock Exchange of Thailand (SET) writes in May's edition of Focus about the launch of 'LiVE', a new blockchain-based platform that aims to boost startups in Thailand.

While Thailand is an aging society, an increasing number of young career people want to be independent from the nine-to-five jobs and are refusing to climb up the corporate ladder. They prefer to group together, brainstorm, work outdoors in a co-working space or coffee shop atmosphere in the nooks and crannies of Bangkok: creating art or tech-based initiatives similar to trends in other major cities around the globe.

Thailand’s economy has been driven by large family businesses, corporations or multi-nationals. Similar to an abundant forest that are comprised of diverse types of trees both dense and rich, a vibrant economy must be filled with powerful driving forces and diversity as well. Creating an ecosystem that is favorable to earnestly supporting the incubation and establishment of startups is top of the Thai government's agenda; whether it's an economy full of dynamic and creative enterprises involved in the agricultural or industrial sectors, or technologically-based firms or creative economies.

Startups are new businesses with potential for high growth but do not qualify under current criteria to list on stock markets. However, these early-stage companies are considered risky investments. To strike a balance between this lower criteria and investor protection, SET has come up with an equity crowdfunding concept that is limited to professional and accredited investors only.

Live Fin Corp Co. Ltd. was established in 2017 and operates on a crowdfunding platform called “LiVE” (short for Launchpad and Investment Vehicle for Enterprises). LiVE's infrastructure has been developed using blockchain technology in order to reduce operational complexity on central depository, clearing house and registrar. Furthermore, the crowdfunding concept has the key benefits of introducing businesses to a wider target group, promoting transparency through a disclosure mechanism, and using partnerships to expand their customer base. The platfrom also provides over-the-counter (OTC) trading services for startups and SMEs to access capital.

LiVE was officially launched this month (May 4) with eight startup companies ready to raise funds using the plaform. These companies operate in a variety of different sectors such as personal storage, food, medical and health, online library, residential properties services, energy, and tourism.

Utilising SET’s strengths as an exchange, companies using LiVE will benefit from its educational resources for entrepreneurs, as well as relationships with institutional investors, venture capitals, corporate venture capitals, and some listed companies which could become business partners in the future. Moreover, future developments will see financial advisors, lawyers, and brokers, getting more involved with the platform.

Companies have to be registered in Thailand in order to join LiVE, have financial statements audited by certified auditors, and company founders and executives must not have criminal records. In addition, businesses need to provide additional clauses on their term-sheets for investor protection, such as investor representatives on the Board and tag-along rights for minority shareholders. Businesses need to do ongoing disclosure after the fundraising process is completed; supplying information regarding funding usage, any impacts on the business and providing annually audited financial statements.

On the investors’ side, there are four types of investors that can invest through this platform. These are institutional investors, venture capitals, corporate venture capitals, and specific investors with annual income of no less than USD 120,000, or with combined assets worth no less than USD 1.5 million, and at least one years' investment experience.

The Stock Exchange of Thailand has created long-term growth for startups and SMEs under the 'Towards Sustainable Growth with Innovation' theme, and has worked closely with the public and private sectors to develop a vibrant and supportive ecosystem. Ultimately, flourishing innovation and creativity, and growing sustainably, will be the key drivers for Thailand's capital market. Moreover, ensuring these markets work for everyone in Thailand and the country retains its leadership within ASEAN.