Empowering the Growth of Thai SMEs and Startups

By: Manpong Senanarong, Senior Executive Vice President, Head of Issuer & Listing Division, The Stock Exchange of Thailand Jun 2023

Empowering the growth of Thai SMEs and Startups

SMEs account for more than 99.5% of all registered businesses in Thailand, and they play an important role in driving the economy. They provide a source of income distribution and they are also the country's largest employers. Nowadays, Thai SMEs and startups face significant barriers to growth, particularly the lack of access to funding sources, knowledge about business management and having the ability to expand.

To address these issues, The Stock Exchange of Thailand (SET), in collaboration with the Securities and Exchanges Commission (SEC Thailand), developed the LiVE exchange (LiVEx) as an alternative fund-raising channel for Thai SMEs and startups across all industries. We intend to prepare these companies to be listed on SET and mai in the near future. Our plan not only increases entrepreneurs' access to funding sources, but also improves their knowledge and ability to do business. Thus, SET has launched the “LiVE Platform,” a tool for SMEs and startups’ capability and readiness.

Preparing for Access to Funding Sources in the Capital Market Through the LiVE Platform

SET collaborates with over 30 partners in all sectors across the country, including government agencies, the private sector, universities and associations to develop a variety of services focusing on the needs of entrepreneurs, SMEs and startups. The LiVE Platform has two main functions, the first of which is the "Education Platform," which is an e-learning source of fundamental knowledge for entrepreneurs. There are more than 500 articles and knowledge clips covering five topics, including: management, marketing, accounting, finance and fundraising and sustainable entrepreneurship and innovation. The second function is the “Scaling Up Platform,” which provides tools and services designed specifically for SMEs and startups to ensure they are well-equipped and ready for fundraising activities in the capital market. For example, in-depth knowledge of e-learning, online assessment tools, standard contract documents serviced by leading law firms such as Baker McKenzie, business advisory services and matching services to enhance business opportunities with Thai listed companies.

Furthermore, the LiVE Platform created “LiVE Academy,” an entrepreneurship development project that includes the Mini Incubation Program, Incubation Program and Acceleration Program. This project aims to support entrepreneurs with varying levels of knowledge and readiness to develop their business scale, create business growth and raise funds through capital market mechanisms, including providing funding support (Grant) to project participants.

LiVEx: Stock Exchange for SMEs and Startups

LiVEx is designed for SMEs and startups with the aspiration to grow, but that are lacking the opportunities to access the capital market with more flexible conditions. The new exchange stands ready to push them towards the larger exchanges: SET and mai, with three main concepts:

1. Light-Touch Supervision: Ensuring that share offering and listing criteria are optimised for SMEs and startups.

2. Investor Protection: Setting investor types and trading methods that align with the light touch supervision principle and investment risk tolerance levels. SEC Thailand has specified investor types to suit their risk levels. Investors must be knowledgeable, experienced and financially able to accept risks, such as institutional investors, venture capital (VC), private equity (PE) and high net worth investors etc.

3. Information-Based: Requiring listed companies to comply with the disclosure of significant information, enabling investors to directly follow information on listed companies and submit any queries.

To raise funds and register in LiVEx, companies must be medium-sized SMEs or larger. In the case of startups, they should have joint venture capital (VC) or private equity (PE) in the company. Financial advisers are not required. However, the company must prepare financial statements according to PAE standards for the past year.

There are currently three companies listed on LiVEx, with five more in the IPO pipeline for 2023. One of SET's primary goals is to foster long-term growth and a supportive ecosystem for Thailand’s startups and SMEs, which play a vital role in bolstering the country's economic growth. This aligns with SET's vision of "Making the Capital Market Work for Everyone."


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