1TECH STARTUP ECOSYSTEM IN CAMBODIA 2022
Challenges, Opportunities, and Ways Forward

Use and dissemination of this research report are encouraged; however, Techo Startup Center (TSC)
requests due acknowledgment. The views expressed in this report are those of the authors and do notnecessarily represent the official positions of TSC or the Ministry of Economy and Finance (MEF).

© TSC 2022
Published By: Techo Startup Center
Floor 11th Business Development Center, Chroy Changvar, Phnom Penh, Cambodia
Tel: +855 81 922 329
Email: info@techostartup.center
Website: www.techostartup.center

This research was undertaken by the research team in the Startup Development Office of TSC
Authors: Phong Kimchhoy, Som Visethvathanak, Srou Lihol, and Dr. Vong Rylida

Principal Investigators:
1.
2.

H.E. Dr. Kong Marry, Under Secretary of State, MEF, and Chairman of the Board of Directors, TSC
H.E. Dr. Taing Nguonly, Director of TSC

ACKNOWLEDGEMENTS
This current report, “Tech Startup Ecosystem in Cambodia: Challenges, Opportunities, and Ways
Forward”, has been made possible with the financial support of the Ministry of Economy and Finance(MEF) and Techo Startup Center (TSC).
The research team would like to extend the gratitude and give special thanks to His Excellency
Dr. Kong Marry, Under Secretary of State of MEF, and Chairman of the Board of Directors of TSC, and
His Excellency Dr. Taing Nguonly, Director of TSC for providing valuable information and advice to theresearch team to sharpen and define the structure of this research during the preliminary stages. The
gratitude is also given to startup professionals who have provided insights that have shaped this research,
namely: Ms. Khoeurn Saksonita and Mr. Lim Kuoysuong who are former Startup Development specialists
at TSC.
The research team also highly appreciates the enthusiastic participation of all target respondents
and participants who got involved in this research for spending their precious time contributing to thisresearch. Their valuable participation in the research enabled the team to complete the research andproduce this report.
These contributions and supports mentioned above are extremely acknowledged and again, theresearch team would like to thank all of them. Hopefully, the report of “Tech Startup Ecosystem in
Cambodia: Challenges, Opportunities, and Ways Forward” would be a significant part of the contribution
to improving the growth of tech startups and the vibrancy and healthiness of its ecosystem in the future.

iTABLE OF CONTENTS
Acknowledgements ................................................................................................... i
Table of Contents ......................................................................................................ii
Executive Summary ................................................................................................ iv
List of Tables ............................................................................................................ vii
List of Figures........................................................................................................... vii
List of Abbreviations ............................................................................................ viii
Definitions of Key Terms ...................................................................................... ix

INTRODUCTION

1

1.1.

Background of Research .................................................................................................................................................................................... 2

1.2.

Research Problem and Significance ......................................................................................................................................................... 2

1.3.

Research Goal and Objectives .................................................................................................................................................................... 4

STARTUP ECOSYSTEM OVERVIEW

5

2.1.

Startup and Its Role in Economic Development .......................................................................................................................... 6

2.2.

Startup Ecosystem in Cambodia ................................................................................................................................................................ 7

2.3.

Challenges Faced by Startups in Cambodia .................................................................................................................................... 8

2.4. Challenges for the Development of the Startup Ecosystem in Cambodia........................................................ 9
2.5.

Startup Regulatory Framework in Cambodia .............................................................................................................................. 10

2.6. Key Initiatives or Programs in the Startups Ecosystem ......................................................................................................... 11

RSEARCH METHODOLOGY

13

3.1.

Research Approach .............................................................................................................................................................................................. 14

3.2.

Sample Size and Sampling Methods ..................................................................................................................................................... 14

3.3.

Data Collection ........................................................................................................................................................................................................ 15

3.4. Data Management and Analysis ............................................................................................................................................................... 16
3.5.

Ethical Consideration .......................................................................................................................................................................................... 17

3.6. Quality Assurance .................................................................................................................................................................................................. 17
3.7.

Scope and Limitations of Research ....................................................................................................................................................... 17

DEMOGRAPHICS AND CHARACTERISTICS
ii

19

KEY FINDINGS AND DISCUSSION
5.1.

25

Objective 1 ...................................................................................................................................................................................................................26
5.1.1. Challenges of Tech Startups in Operating Business ..................................................................................................26
5.1.2. Support of ESOs in the Ecosystem Accessed by Tech Startups.................................................................. 27
5.1.3. Types of Support Received by Tech Startups from ESOs and the Challenges .............................29

5.2.

Objective 2.................................................................................................................................................................................................................. 32
5.2.1. Supports Provided by ESOs to Tech Startups and the Challenges ........................................................... 32

5.3.

Objective 3..................................................................................................................................................................................................................36
5.3.1. Connection Among ESOs in the Ecosystem ....................................................................................................................36
5.3.2. Opportunities for ESOs to Collaborate .............................................................................................................................36

CONCLUSION AND RECOMMENDATIONS
6.1.

39

Challenges Faced by Tech Startups ................................................................................................................................................... 40

6.2. Challenges Faced by ESOs............................................................................................................................................................................. 41
6.3. Opportunities for ESOs to Collaborate ........................................................................................................................................... 42

REFERENCES ............................................................................................................. 43iii

EXECUTIVE SUMMARY
The goal of this research is to contribute to the improvement and the achievement of a robust
and vibrant tech startup ecosystem in Cambodia.
Through extensive literature review, there is a significant growth of startups, in particular, techstartups in the last five years even though the startup ecosystem is still in a nascent stage. There areseveral beneficial programs and initiatives supporting startups and their ecosystem in Cambodia, ranging
from developing and running incubator/accelerator programs and startup-related events, establishingkey institutions in producing and training talents, and initiating public and private funding in order tosupport startups as well as small and medium enterprises (SMEs). In preparation for the adoption of thedigital economy and industrial revolution 4.0 in Cambodia, the Royal Government of Cambodia (RGC)
has passed several laws, policies, and strategies with the purpose of supporting and empowering startups
and SMEs. Despite the progress, more specific acts and special regulatory frameworks governing startups
are still needed in order to help startups flourish in Cambodia.
There is a small number of previous research studies on startups and their ecosystem in
Cambodia which is considered to be a foundation in order to provide a mapping of the startup or
entrepreneurial ecosystem in Cambodia. Most of those studies found some challenges faced by startups
or entrepreneurs, and one research showed some challenges in the development of the startup
ecosystem in Cambodia. However, there is a limited number of holistic research which aims to gather
and aggregate data and information from all stakeholders in Cambodia’s tech startup ecosystem withthe purpose of identifying the challenges, opportunities, and ways forward. To fill the gap of previous
research, this research on “The Tech Startup Ecosystem in Cambodia: Challenges, Opportunities, andWays Forward” is essential. The objectives of this research are: 1) to identify the key challenges faced bytech startups in operating and accessing supports and services provided by entrepreneurial support
organizations (ESOs) in the tech startup ecosystem; 2) to identify the challenges with regard to providing
support to tech startups by ESOs in the tech startup ecosystem, and; 3) to identify the opportunities
perceived by each ESO on how to cooperate and collaborate interactively and effectively in the techstartup ecosystem.
A combination of both quantitative and qualitative research approaches was employed in thisresearch. Using a mixed method allows researchers to triangulate information and complement the
explanation of the phenomenon. Due to the widespread of the COVID-19 pandemic during the datacollection process, this research received responses in the form of an online self-administered survey
from 122 target respondents, and online in-depth interviews (IDIs) were conducted with 19 target
participants. Of the 122 respondents in the online survey, there were 65 startups, 4 investors, 3
corporates, 6 associations, 11 incubators/accelerators, 8 coworking spaces, 8 service providers, 4academic institutions, 3 government institutions, and 10 development partners. Among the 19 IDIs, there
were 8 tech startups, 3 government institutions, 2 development partners, and the remaining participantsconsisted of one from each aforementioned type of actors. Attempts were made to conduct an IDI withcorporates working with or supporting tech startups for the purpose of this research. However, no
corporates volunteered to participate in any IDI for this research.
This research found that a vast majority of tech startups faced three main challenges in theirbusiness operations: 1) the lack of funds; 2) the lack of team members; and 3) the lack of support. This
research also found that tech startups received the most support from incubators/accelerators andreceived the least support from service providers. Three major forms of support that the tech startups
have been receiving from different ESOs were mentoring, network building, and incubator/acceleratoriv

programs. However, receiving and accessing these forms of support also comes with a few challenges.
Tech startups claimed that they faced six common challenges when receiving and accessing these formsof supports from ESOs and these challenges can be classified as internal factors from tech startups
themselves and external factors from ESOs. Limited funding, lack of technical skills, and insufficient time
allocation were categorized as challenges in internal factors whereas the external factors include
inadequate mentoring quality, lack of learning resources, and laboratory facilities.
The findings of this research showed that 77.2% of ESOs provided several types of support totech startups. Out of those forms of support, network building, mentoring, and connections toinvestment were found to be the most frequent types of support provided to tech startups. Despite
the provisions of supports, ESOs also encountered several challenges when offering supports to techstartups, and these challenges are varied from one ESOs to another depending on their respective roles
and activities in the startup ecosystem. The common challenges reported by these ESOs can be
categorized as internal factors stemming from the ESOs themselves and external factors stemming fromtech startups. The internal factors are comprised of three common challenges that include insufficientfunding, inadequate quality and quantity of mentors, and the lack of resources/facilities. The external
factors include the lack of quality startups, insufficient time and commitment, and lackluster fulfillmentof reporting requirements.
As perceived by tech startups and ESOs, the opportunities to collaborate towards a final goalof Cambodia’s startup ecosystem growth differ in accordance with the nature and roles of each
respective ESO. Nevertheless, the findings of this research revealed common activities perceived asopportunities by ESOs and these activities can be classified into six different categories include capacity
building, startup formalization, talents and human resources, investment growth, business support, andevents and research.
Key findings found in the research lead to the following recommendations:
•
•
•
•
•
•
•

•

•
•

Tech startups should minimize the negative thoughts by identifying and replacing themwith possible solutions.
Tech startups should improve their time management by using the urgent and importantmatrix to prioritize their to-do lists.
ESOs should co-organize investment pitch series regularly to allow tech startups to pitch
to a large pool of investors.
ESOs should co-produce TV series on investment pitches to increase opportunities fortech startups to receive investment.
ESOs should select and invite high quality mentors to support tech startups.
Tech startups should be ready for the time commitment to the whole process of
incubator/accelerator programs or other programs.
Tech startups should seek support and guidance in fulfilling the reporting requirementsfrom other startups who are experienced in receiving investment funds from investors
or financial support from other ESOs.
ESOs should collaborate with service providers to assist tech startups in building theircapacity in reporting document preparation, especially with regard to financial
statements.
ESOs should collaborate with service providers to simplify the process and develop
digital tools for reports and document submission.
ESOs should identify new actors or players in the ecosystem and involve them in any
relevant events or programs to support tech startups and the ecosystem as a whole.

v

•

vi

ESOs should organize knowledge-sharing or conferences on a regular basis to rigorously
stay updated with the activities, progresses, and achievements of each actor in theecosystem in order to build collective knowledge and explore better ways of achievinga healthy ecosystem in Cambodia.

LIST OF TABLES
Table 2.1: Role of Startups in Economic Development ………………………………………………………………….….… 6
Table 2.2: The Challenges Faced by Startups in Cambodia ………………………………………………………………… 8
Table 2.3: Challenges for the Development of the Startup Ecosystem in Cambodia …………………………… 9

LIST OF FIGURES
Figure 2.1: Key Players in the Tech Startup Ecosystem in Cambodia ………………………………………….……..… 7
Figure 2.2: Key Startup Related Policies and Regulatory Frameworks in Cambodia ……………………….…… 10
Figure 2.3: Key Initiatives or Programs to Support Startups in Cambodia ………………………………………….… 11
Figure 3.1: Data Collection Tools and Number of Respondents/Interviewees ………………………………….… 15
Figure 3.2: Brief Description of Data Collection Tools …………………………………………………………………….… 16
Figure 3.3: The Actors in Startup Ecosystem in Cambodia ………………………………………………………………… 18
Figure 5.1: Percentage of Tech Startups in Accessing Supports from Each Type of ESOs ………………...… 28
Figure 5.2: Participation of Each Actor in Tech Startups Related Events Organized by Other ESOs ….. 36
Figure 5.3: Opportunities for ESOs to Collaborate …………………………………………………………….………..…… 38vii

LIST OF ABBREVIATIONSAgriTech:

Agriculture Technology

CleanTech:

Clean Technology

EdTech

:Education Technology

ESOs

:

Entrepreneurial Support Organizations

FinTech:Financial Technology

GDP:

Gross Domestic Products

HealthTech:

Health Technology

IDIs

:

In-Depth Interviews

IDP:

Industrial Development Policy

IoT:Internet of Things

MEF:

Ministry of Economy and Finance

MVPs

:

Minimum Viable Products

NUM:

National University of Management

RGC:

Royal Government of Cambodia

R&D:

Research and Development

SMEs

:

Small and Medium Enterprises

STI:

Science, Technology & Innovation

TSC:

Techo Startup Center

VC:

Venture Capitalviii

DEFINITIONS OF KEY TERMS

Concepts/Icons
Startup ecosystem
stakeholders

StartupInvestor

Corporate

Association

Incubator/
Accelerator

Coworking Space

Definitions
Key actors in the tech startup ecosystem which include startups, investors,
corporates, associations, incubators and accelerators, coworking spaces,
service providers, corporates, academic institutions, government
institutions, and supporters.
An institution or process that creates and manages business using
innovation as a core to develop a business model under uncertain and risky
conditions but has huge potential for fast growth (RGC, 2020a). This
research considers tech startups that bring technology products or services
to market as target participants in the research. Kem, Sou, Ng, and Chan
(2019) define six categories of the tech startup in Cambodia, including
Financial Technology (FinTech), digital media & advertising, e-commerce &logistics, digital marketplaces, development services, and other disruptor
models such as Health Technology (HealthTech), Education Technology(EdTech), Agriculture Technology (Agri-Tech), and transportation.

High-net-worth people or private firms that provide capital to tech startups
with the expectation of receiving financial returns or equity stake.
A single entity or a large company that organizes or provides financial
support in organizing tech startup events. In addition to this, Feld (2012)
states that the two most powerful things large companies can do for thestartup community are (1) provide a convening space and resources for
local startups, and (2) create programs to encourage startups to build
companies that enhance the large company’s ecosystem.
A group of entrepreneurs or startups organized for a joint purpose ofencouraging and supporting entrepreneurs or startups to use innovativetechnology in business and often engage in formal and informal meetups intech startup-related events.
An organization, place, or program that provides mentorship to techstartups to nurture them in cultivating their ideas to understand better theircustomers, build MVPs, design their business plan, help them grow, andstrengthen their investment credibility.

A type of working place where the working environment and space areshared with other people. In this research, the coworking space provides aworking place for tech startups.

ix

A company that provides legal services (such as registration), or accounting
services (such as accounting and bookkeeping system), or technology
services (such as software solution) to tech startups.

Service Provider

Academic
Institution

Government
Institution

Development
Partnerx

A university or institute that provides entrepreneurship and innovativetechnology courses/programs to students in order to build entrepreneurial
spirit through active engagement in innovation, technology, andentrepreneurship-related activities.
A government ministry or an institution under the guardianship of a ministrythat supports startups or entrepreneurs to grow and prosper. The support
can be through regulatory framework, financial support, technical support,
or incubation and acceleration program.

An entity that provides technical support and funding to startups orentrepreneurs. It also provides financial support in organizing events related
to tech startups including accelerator and incubator programs.

Chapter 1: Introduction

INTRODUCTION

1Chapter 1: Introduction

1.1.

Background of Research

The term “Startup” has gained tremendous popularity over the last decade. A startup is an
institution or process that creates and manages business using innovation as a core to develop a businessmodel under uncertain and risky conditions but has huge potential for fast growth (RGC, 2020a).
Similarly, a startup is defined as a human institution established to develop a new product or service
under conditions of extreme uncertainty (Ries, 2011). This definition reflects the early stage of a company
during the development of an innovative product or service, but has yet to produce a market-fit productor service that requires the process of validation and modification of products or services and businessideas. Another key characteristic of startups is scalability; all startups seek the right business model thatis scalable without having the need to greatly increase its human or financial resources. Likewise, Blank(2020) defines one of the several characteristics of a startup as being a temporary company in searchof a repeatable and scalable business model.
With the mutually agreed outcome of sustainable development, businesses, organizations, andindividuals collaboratively interact as a system to support each other and grow together; that is the socalled “Startup Ecosystem” (Chillakuri, Vanka, & Mogili, 2020). Aleisa (2013) defines a startup ecosystem
as a society of founders with initiative ideas equipped with skills, young dynamic companies with talents,
incubators with mentors and capital, early adopters, and the media. These entities or individuals connect,
interact, and help each other to strengthen the ecosystem and increase their value.
Startups have been rapidly propagating globally and into Cambodia, leading to a significant
increase in the number of startups in Cambodia. Kem et al. (2019) stated that there are several factors
which are responsible for the growth of startups in Cambodia, such as increasing awareness of basic
digital needs, growth of market opportunities related to digital economy due to an increasing tech-savvy
demographic, continued entrants from international technology companies that create market
opportunities, and the evolution and transformation of a certain number of startups from various
ideation and incubation programs towards becoming viable startups.
Startups leverage innovation and technology as a core mechanism in order to develop and bringnew products, solutions, and services to the market. For instance, a startup can build a digital market
platform equipped with technology that allows businesses and small and medium enterprises (SMEs) tooffer goods and services more efficiently to consumers (Techo Startup Center [TSC], 2020). It is
undeniable that innovation is essential to the growth of a digital economy, and startups are valuablechange-makers and disruptors who give rise to innovative ideas across industries. Therefore, the RGC
has developed and endorsed Cambodia Digital Economy and Society Policy Framework 2021-2035 thatpartly aims to establish a strong startup ecosystem to catalyze the digital economy in Cambodia.

1.2.

Research Problem and SignificanceA robust and vibrant startup ecosystem with fully supported functions is certainly required tonurture startups and help them overcome challenges toward success. However, a research carried out
by Mekong Strategic Partners in 2018 and a research conducted by TSC in 2020 commonly found thatthe startup ecosystem in Cambodia is still in the nascent stage, and each sector is not fully interactive(Kem et al., 2019; Vong, Ty, & Chhoeun, 2020). The interaction between each stakeholder in the startup
ecosystem is crucial in helping startups because it can create a conducive environment in which startups
can flourish, nurture, and effectively access funding, mentorship, useful resources, entrepreneurship, andtechnical assistance (TSC, 2020).

2

Chapter 1: Introduction
In order to generate more positive progress in the Cambodian tech startup ecosystem pertaining
to the current situation and trend of the startup ecosystem, it is necessary to identify the stakeholders,
their roles, activities, and challenges. In other words, there is a need for the RGC to acquire up-to-date
data and information, including the roles, activities, and challenges within the tech startup ecosystem inorder to develop an effective policy that is more startup-friendly. Esty and Rushing (2007) highlighted
the obstruction to effective policy-making due to the lack of data; thus, should this problem be definedand addressed, the process of policy-making can become more direct, nimble, tailored, and targeted.
Kem et al. (2019) recommended the RGC to pilot test policies and iterate where necessary, as effective
policies demand revisions based on real-time data and observation of market dynamics.
Ek (2017) conducted a study on the mapping of the startup ecosystem in Cambodia thatinterviewed startup supporting organizations, universities, associations, companies, funding agencies, andgovernment organizations. However, this study did not interview startups, and the number of interviews
with each stakeholder was not disclosed. This led to lack of in-depth and insightful information fromstartups. Later on, Kem et al. (2019) conducted a study on the tech startup ecosystem in Cambodia thatinterviewed and surveyed over 120 several stakeholders in the startup ecosystem through various datacollection methods both in qualitative and quantitative approaches. However, the study did not mention
the number of participants in each data collection method. In addition to this study, Khieng, Mason, andLim (2019) conducted a study that interviewed startup founders, business and academic leaders involvedin entrepreneurship centers, as well as invocation and entrepreneurship education in Phnom Penh. This
study focused on the role of academic institutions in supporting startups and entrepreneurs, but did notinclude other stakeholders. A recent research report, conducted by Swisscontact and Impact Hub Phnom
Penh on the entrepreneurial ecosystem in Phnom Penh, surveyed 312 entrepreneurs and 86 ESOs using
the social network analysis tool to examine the connections between actors in the ecosystem and six
dimensions of ecosystem health framework in order to assess the healthiness of entrepreneurial
ecosystem in Cambodia (Swisscontact & Impact Hub Phnom Penh, 2021). This study found several
challenges with regards to the ecosystem connections, and produced recommendations to improve thehealth of the entrepreneurial ecosystem. However, this study did not focus solely on tech startups, but
all enterprises in general. The challenges identified in the study were all encompassing, thus, too generaland disaggregated by entrepreneurs and ESOs.
It is acknowledged that the aforementioned studies are crucial in providing a broad overview of
the tech startups or entrepreneurial ecosystem in Cambodia; however, they were not conducted in aholistic way. More specifically, these studies did not gather information from all types of stakeholder in
Cambodia’s tech startup ecosystem in order to identify the challenges, opportunities, and way forward.
Therefore, this research aims to fill in this gap of knowledge and literature by providing empirical data
and up-to-date information from all types of stakeholder in Cambodia’s tech startup ecosystem.
In addition to filling the gap of the previous research regarding the tech startup ecosystem in
Cambodia, this research will provide a better understanding of the challenges faced by stakeholders in
the tech startup ecosystem and produce practical recommendations that can inform policies, strategies,
and plans to improve the tech startup ecosystem in Cambodia. The results of this research will be used
as a reference for other organizations and researchers who wish to do further research to constantly
and rigorously improve Cambodia's startup ecosystem. Finally, the result of this research will also serve
to contribute partially to the development and implementation of ‘Startup Cambodia Digital Platform’,
which is a platform that serves to provide information-centric models by allowing reliable informationand data to be openly shared and accessible.

3Chapter 1: Introduction

1.3.

Research Goal and Objectives

The goal of this research is to contribute to the improvement and achievement of a robust andvibrant tech startup ecosystem in Cambodia. In order to achieve this goal, this research has three main
objectives as listed below:
•
•
•

4

To identify key challenges faced by tech startups in operating their business and accessing
supports and services provided by ESOs.
To understand the challenges of ESOs in providing support to tech startups.
To identify opportunities perceived by each stakeholder on how to collaborate interactively inthe startup ecosystem.

Chapter 2: Startup Ecosystem Overview

STARTUP ECOSYSTEM OVERVIEW

5Chapter 2: Startup Ecosystem Overview
Chapter 2 aims to define the concept of “Startup”, and its roles in economic development. It
also sketches an overview of startup ecosystem in Cambodia and provide a review of literature on
challenges of startups and challenges pertaining to startup ecosystem development in Cambodia. In
addition to this, this chapter also identifies and highlights key regulatory frameworks as well as key
initiatives and programs relating to startups in Cambodia.

2.1.

Startup and Its Role in Economic Development

A startup refers to a company or a project which is sought out and developed by an innovator(in accordance with / with the framework of) a scalable business model (Adepoju, Oluwasina, & Awah,2020). It is a young company that develops a product or service, brings it to the market, and makes it
irreplaceable for customers. Notably, a majority of startups is characterized by their focus on innovationin which they address the deficiencies of existing products and services, or create entirely new goods
or services (Katila, Chen, & Piezunka, 2012).
Due to the increasing emergence of modernized and innovative companies with the ability totransform the global economy, the RGC recognizes the value and importance of startups with regards
to economic growth as startups leverage innovation and technology as a core mechanism to develop
and bring new products, solutions, and services to the market. It is crucial to understand the roles ofstartups in the growth of the economy. Rafique (2020) identified the main roles of startups with regards
to the development of a country’s economy, especially developing countries such as Cambodia as follow:
Table 2.1: Roles of Startups in Economic Development
Employment Creation

Talent Pool Development

Startups are reported to be agreater source of employment
generation as the amount of newjobs they create is greater thancorporates or big enterprises in thesame sector, reducing and solving
the issue of unemployment in the
country.

With appropriate and strong
leadership from the government
and academic institutions, a big poolof talents – especially in technology
and business – can be cultivated inorder initiate startups. Moreover,with a conductive environment
created by regulatory support (ofthe government), these startups
are expected to grow and mature.
Research & Development(R&D) Promotion
Startups play a significant and majorrole in promoting R&D as they
produce technology-based as wellas knowledge-based products orservices in search of more creative
innovations and sustainable growthmodels. This can create anapplication-oriented culture or
research,
especiallyamongstuniversity
students
andresearchers, which can in turninspire them to implement theirideas via initiating a startup.

Gross Domestic Products(GDP) Growth
When startups experience growthand maturity, the GDP of thecountry will rise due to increasing
economic activities as well as thesubsequent increase of capital flow
and domestic household income.

6Standard of Living
Improvement
As startups leverage innovation andtechnology as a core mechanism inorder to develop and bring new
products, solutions, and services tothe market, people will experience
better services and products, andconsequently, they will also
experience a better standard ofliving, especially for the people wholive in rural areas.
Wealth Creation
At the initial stage, startups develop
innovative ideas and productprototypes which attract the first
injection of investment funds,
mainly from individual investors. As
the startups gain traction, they will
also garner more investment funds
from Venture Capital (VC) firms as
well. This maturity process not only
benefit startups, but it also benefits
the entire economy due to thewealth being created from the
distribution of investment funds
and the flow of funds within the
country’s economy.

Chapter 2: Startup Ecosystem Overview

2.2.

Startup Ecosystem in Cambodia

Through extensive literature review, it is observed that the concept of startup was initiallyintroduced in Cambodia in 2006 via an initiative of the National University of Management (NUM)
called the ‘National Business Plan Competition’, which was NUM’s first university-based entrepreneurshipand pitching competition (Chan, 2018). Two years following this first initiative by NUM, the first ‘Barcamp
Cambodia’ – an event where tech teams (technology-savvy teams) and companies gathered to share
their latest innovations and technologies – was launched (Som, 2015). In 2011, SmallWorld launched its
coworking space intending to support startups and provide facilities for hardware workshops (Nov,
2020). At the same time, the first international hackathon event in Cambodia – called “Startup Weekend”– was launched (Drennan, 2013), when there was an estimate of less than 50 active tech startups inCambodia (Kem et al., 2019). Between 2014 and 2019, the number of startups in Cambodia had grownsignificantly along with the number of actors within the ecosystem, with more than 300 active techstartups, more than 23 coworking spaces, and more than 15 seed/early-stage incubators in 2018 (Kemet al., 2019).
A startup ecosystem consists of people, startups, and other related organizations that work asa system to support or scale startups. These relevant organizations, either physical or virtual entities, arecategorized as follows: startups, government, funding and investment, association and development
partners, big companies, universities, and research institutions, and supporting organizations (incubator,
accelerator, and coworking space) (Feld, 2012). There are several studies which mapped out the startup
and/or entrepreneur ecosystem in Cambodia, including a study by Young Entrepreneurs Association of
Cambodia in 2017, a study by Mekong Strategic Partner and Raintree in 2018 and a study by Swisscontact
and Impact Hub Phnom Penh in 2021. Figure 2.1 presents the key players in the tech startup ecosystem
in Cambodia, but it is not exhaustive.

Figure 2.1: Key Players in the Tech Startup Ecosystem in Cambodia
Source: Authors (2022)

7

Chapter 2: Startup Ecosystem Overview

2.3.

Challenges Faced by Startups in Cambodia

Kem et al. (2019) highlighted several factors which are responsible for the growth of startups inCambodia. These factors include the increasing level of awareness among Cambodian people regarding
basic digital needs, the expanding growth of market opportunities within the digital economy due to thehigh demographic of tech-savvy individuals, the continued influx of international technology companies
in Cambodia, and the increasing number of viable startups emerging from various ideation and incubation
programs. The table below highlights the challenges faced by startups in Cambodia, as excerpted froma wide range of previous studies and literature.
Table 2.2: The Challenges Faced by Startups in Cambodia-

Funding-

Networking-

Supporting-

Limited fund for startups at the ideation and prototype stage(Swisscontact & Impact Hub Phnom Penh, 2021)
Limited funds for startups from angel investors and VC (Ek, 2017;
Kem et al., 2019)
The inherent risks of investing in startups are high, acting as adeterrent for prospective investors (Ek, 2017)
Limited fund for startups from crowds or public contributors dueto their incomprehension of crowdfunding (Ek, 2017)
Lack of mentorship from mentors with experience regarding
startups (Ek, 2017; Kem et al., 2019)
Lack of connectivity with ESOs (Swisscontact & Impact Hub Phnom
Penh, 2021)
Difficulty in finding the right financial sources and network (Ek, 2017)
Lack of support for startups in their early-stage (Ek, 2017;
Swisscontact & Impact Hub Phnom Penh, 2021)
Lack of human resources with the entrepreneurship skills and highcommitment to support startups (Ek, 2017)
Lack of support services such as R&D and legal perspectives (Ek,2017)
Lack of access to prototyping facilities (Srang, Taing, & Kuok, 2021)
Inadequate talents who have both entrepreneur and technical skills
in managing startups (Ek, 2017; Srang et al., 2021; Swisscontact & Impact
Hub Phnom Penh, 2021)

Talent--Regulatory framework-

Limited talents in technical skills due to low tertiary enrollment inmajors of science, technology, engineering, and math as well as
information communications technology majors (Cambodia
Academy of Digital Technology, 2021)
Complicated tax filling for startups (Ek, 2017; Kem et al., 2019)
Difficult and time-consuming business registration process forstartups (Ek, 2017; Kem et al., 2019)
Difficulty in accessing accurate, up-to-date information about laws
and regulations (Khieng et al., 2019)
Lack of specific policy and regulation for supporting the startups(Kem et al., 2019; Srang et al., 2021)

Note: The information in above table is taken from four different research that focused on the startup
ecosystem in Cambodia. Among them, two studies solely focused on tech startups while the other two
focused on all types of startups including tech startups.

8Chapter 2: Startup Ecosystem Overview

2.4. Challenges for the Development of the Startup Ecosystem in
Cambodia
Several challenges, ranging from cultural perception to policy and regulatory frameworks, hinders
the startup ecosystem in Cambodia from achieving a healthy and vibrant growth. These challenges
create a fragmented startup ecosystem within Cambodia (Srang et al., 2021). Categorizing by actors
within the startup ecosystem, including universities, startup founders, startup terms, investors, andgovernment institutions, the challenges are as follows:
Table 2.3: Challenges for the Development of the Startup Ecosystem in Cambodia-

Academic institutions-

Entrepreneurs/startup
founders-

Startup teams-

Investors-

Government
institutions-

Insufficient talents with technical skills, ranging from mid to seniorlevel, in managing or executing projects (Kem et al., 2019)
Lack of infrastructures/laboratories in universities for testing andprototyping (Srang et al., 2021)
Limited teaching and resources to support students’ projects in
implementing experiential learning programs (Kem et al., 2019)
Lack of access to mentorship for young and inexperienced startup
founders (Kem et al., 2019)
Lack of defined business model and commitment in executing
business ideas (Ek, 2017)
Lack of gender diversity among startup founders since a majorityof them are men (Kem et al., 2019; Swisscontact & Impact Hub
Phnom Penh, 2021)
Lack of high-skilled talents to build a strong team, especially as amajority of all members in a startup are fresh graduates with limited
knowledge of basic financial models (Ek, 2017; Kem et al., 2019)
Difficulty in accessing and receiving up-to-date policies andregulations relating to business (Kem et al., 2019)
Different requirements or criteria set by institutional investors orangel investors to invest in a startup (Kem et al., 2019)
Difficulty for startups in receiving investments due to the demand
for a high standard of due diligence from VC firms (Kem et al.,2019)
Lack of specific policy and regulation for supporting startups (Kemet al., 2019; Srang et al., 2021)
Lack of clear process for implementing tax incentives, especiallywith regard to tech startups (Kem et al., 2019).

9

Chapter 2: Startup Ecosystem Overview

2.5.

Startup Regulatory Framework in Cambodia

It is undeniable that an appropriate regulatory framework is considered one of the crucial factors
to facilitate the development, growth, and success of startups and SMEs. The RGC has passed several
laws, policies, and strategies with the aim of supporting and empowering startups and SMEs to raise theirreadiness for the adoption of a digital economy and the industrial revolution 4.0 in order for the startups
and SMEs to be able to significantly contribute to Cambodia’s economic growth and to achieve the
RCG’s strategic visions in 2030 and 2050. The key policies and regulatory frameworks are listed inchronological order in Figure 2.2.

The Strategic Framework andPrograms for Economic Recovery in
the Context of Living with the
COVID-19 in a New Normal 20212023

Cambodian ICT Master
Plan 2020

The Cambodia’s Science,
Technology & Innovation
Roadmap 2030 (STI
Roadmap 2030)

National Strategic
Development Plan
2019-2023

The Management, Use andProtection of Identification
Data Sub-Decree

The Law on Consumer
Protection

Industrial Development
Policy (IDP) 2015-2025

The Digital Economy
and Society Policy
Framework 2021-2030

2021
2020
2019
2018
Before 2018

Law on E-Commerce

The Rectangular Strategy
Phase IV

E-Commerce Strategy

FinTech Development
Roadmap (2020 – 2025)

Figure 1.2: Key Startup-related Policies and Regulatory Frameworks in Cambodia
Source: Authors (2022)

10

Chapter 2: Startup Ecosystem Overview

2.6.

Key Initiatives or Programs in the Startups Ecosystem

Although there are claims that there is a shortage of best practices supporting startups inCambodia, the literature review revealed some good activities/programs with great non-exhaustive
initiatives as shown in the table below:

Turing Hackathon
Digital SME Accelerator

2021

Cambodia Women in Tech Award
National Business Programme for YouthAngkor 500 Global Accelerator Program
Bandos Digital Startup 2021

2020

Reverse Innovation (RI) Program
Cambodia Women in Tech Award
DakDam Incubator program
Cambodia Entrepreneurship Day
Angkor 500 Ideation Incubator
HacKH the Crisis
Angkor 500 Business Activation
Digital Cambodia 2020
Sisters of Code2019

Techno Innovation Challenge Cambodia 2019
SHE Accelerator
SmartScale
WE Act project (five-year project)
The SmartStart Young Innovator Program (cohort-based program)

2018

SmartSpark (cohort-based program)
CJCC Accelerator program
BIO Program
MOC 101 Incubator

Before 2018

Cambodia ICT Awards (annually)
BarCamp Cambodia (annually)

Figure 2.3: Key Initiatives or Programs to Support Startups in Cambodia
Source: Authors (2022)

11

12

Chapter 3: Research Methodology

RSEARCH METHODOLOGY

13

Chapter 3: Research Methodology
This chapter lays out the research approach employed within this research, the number ofsamples and sampling techniques, data collection tools and the data collection process, data management
and analysis, ethical consideration, quality assurance, as well as the scope and limitations of this research.

3.1.

Research Approach

To respond to the goal and objectives of this research, a combination of both quantitative andqualitative research approaches was employed. Using the mixed method, the researchers were able toutilize the strengths of both quantitative and qualitative methods in order to achieve a broader andbetter understanding of the research problems (Creswell, 2011). The purposes of using the mixed method
are to triangulate information, elaborate the explanation of a phenomenon, identify specific respondents
for case studies or success stories after they are surveyed, provide new insights, and expand the rangeof the study (Greene, Caracelli, & Graham, 1989).
Through the quantitative method, a survey was used to identify the number of tech startups
and actors within Cambodia’s startup ecosystem. The survey is also used to determine various sectors
in which tech startups and other ecosystem actors were concentrating and working in, and external
stakeholders whom tech startups and other ecosystem actors were connecting with at the time.
Challenges to tech startups in terms of accessing support and challenges to actors within the ecosystemin terms of providing support to tech startups were detected. Through the qualitative method, IDI was
employed as a means of data collection in order to explore and comprehend the challenges faced byeach actor in the ecosystem and their initiatives or programs or successful operations which havecontributed to improving the tech startup ecosystem.

3.2.

Sample Size and Sampling Methods

In quantitative studies, probability sampling is typically employed in order to ensure that
individual members (target respondents) of the population have an equal likelihood of being chosen asa sample. However, this research faced a limitation when it came to considering this sampling method
as there was a lack of access to a population list of tech startups and actors within the ecosystem in
Cambodia, which in turn impeded the creation of a target respondent’s list frame for random sampling.
On the other hand, non-probability sampling is most often employed in cases in which the target
respondents are chosen based on availability and convenience (Babbie, 1990). This research utilized two
forms of non-probability sampling: purposive sampling and snowball sampling. The target respondents ofthis research were chosen through purposive sampling, whereby they were selected for a specificpurpose based on the researchers’ judgement (Cohen, Manion, & Morrison, 2000). In this sense, theresearchers handpicked the respondents for the online survey based on the definitions of theirrespective roles in the ecosystem. In addition to purposive sampling, the method of snowball sampling
was also employed in order to reach out to more respondents. Naderifar, Goli, and Ghaljaie (2017)
stated that snowball sampling is typically employed when it is difficult to access target respondents withthe appropriate characteristics; thus, more respondents are recruited from the network of existing
respondents
This research identified several sources for the data on the total number of tech startups aswell as the types of actors in the ecosystem. Kem et al. (2019) estimated that Cambodia had
approximately 300 tech startups in 2018. In addition, a 2021 study conducted by Swisscontact andImpact Hub Phnom Penh identified 312 entrepreneurs and 86 ESOs. Even though there was no concreteor solid data on the total number of tech startups and each actor in the ecosystem, this research study
aimed to collect information from all active tech startups and other all actors in the ecosystem. In June
and July 2021, the research team identified and listed all active stakeholders within the tech startup
ecosystem. The total number of tech startups found was approximately 120 which was lower than the14

Chapter 3: Research Methodology
number found in previous studies. After compiling the data and consolidating it into a list, the researchteam reached out to the actors via different communication channels, including email, phone call,
Telegram and Facebook page.
The target population of this mixed method research was the tech startup ecosystem
stakeholders in Cambodia. The target participants, as shown in figure below, include tech startups,
investors, corporates, associations, incubators and accelerators, co-working spaces, service providers(legal, accounting, and technology), academic institutions, government institutions, and development
partners. The figure below illustrates the number and categories of participants that responded to thesurvey and participated in the IDIs.

Surveyed Respondents + In-depth Interviewees

65 + 8

4+1

3

6+1

11 + 1Tech
Startups

Investors

Corporates

Associations

Incubators/
Accelerators

8+1

8+1

4+2

3+2

10 + 2

CoworkingSpacesService
ProvidersAcademic
Institutions

Government
Institutions

Development
Partners

Figure 3.1: Data Collection Tools and Number of Respondents/Interviewees
Source: Authors (2022)

3.3.

Data Collection

It was crucial to test the questionnaire and question guide before starting the fieldwork. Pilottesting the questionnaire and question guides had helped the research team with identifying questions
that were unclear or those that could lead to biased answers, as well as any problem with thequestionnaire, the question guides, or the data collection technique. Thus, adjustments were made to
the questionnaire, question guide and data collection technique, and several actors were contacted totest the survey questionnaire and the question guides.
For the survey questionnaire, a method of internet-based data collection method was employed
via the data collection tool, KoboToolbox, allowing data to be immediately available after the surveys
were submitted. This was a self-administered questionnaire in which a survey link was provided to the
respondents who filled out the questionnaires by themselves and without an interviewer. A concrete
introduction that precisely informed the target respondents about the research goal, objectives as well
as a persuasive message requesting them to participate were developed. The questions were also
developed in a way that could be easily understood by the respondents. A short and concise video
tutorial on how to fill out the answers for the questions presented in KoboToolbox was also preparedand sent to target respondents. With user-friendly interface of KoboToolbox, respondents were able to15

Chapter 3: Research Methodology
properly fill in the questionnaire. For the communication channel, the research team used different
channels including email, Telegram, phone call, and Facebook Messenger to reach the target participants.
For IDIs, the interviews were conducted by the TSC research team who are experts in thequalitative data collection. The interviews were conducted online using Microsoft Team and recordedwith the consent of the target participants. The question guides were sent to a few of the participantsin advance as they requested to see it prior to being interviewed. Among 22 interviews, one of themwas conducted via phone call due to a problem with internet connection.
The figure below describes briefly the data collection tools used in the survey and the IDI.
SurveyIn-depth Interview

There was only one structured digitalquestionnaire developed. Most of thequestions in the demographic and general
information sections could apply to all typesof target respondents. However, a few
different questions were developed for
different actors depending on their nature,
characteristic, and role in the tech startup
ecosystem. The survey used a selfadministeredapproachtocollect
information from target respondents.

The different interview guides weredeveloped in order to collect informationfrom different actors (target participants) in
IDIs. The questions were concerning theirroles and duties in supporting tech startups,
key challenges in providing supports to techstartups, their perspectives on the situationof the tech startup ecosystem in Cambodia,
as well as connections and opportunities towork with other actors in order to improve
the tech startup ecosystem in Cambodia.

Figure 3.2: Brief Description of Data Collection Tools
Source: Authors (2022)

3.4. Data Management and Analysis
For the survey, all filled questionnaires were checked by the TSC research team to ensure theaccuracy of data, as well as to reapproach a few respondents when encountering missing or incomplete
data, or where further clarifications were needed on the given answers. The data were stored in the
KoboToolbox server. Stata version 16 was used to analyze the data. Descriptive statistical analysis wasused to determine the frequencies of key variables and all survey questions. The data were disaggregatedby key variables, including type of target respondents, location, gender, focus sector, and stage ofstartups. In this research, the advance statistical tool was not used to answer any specific question. Only
descriptive statistics were used to describe and summarize key characteristics of the key variables which
serves to answer the research objectives.
For the IDIs, each interview was put in the expanded notes immediately after the interviews
were conducted and then were transcribed in Khmer or English depending on the language spoken during
the interview and typed into a computer in Microsoft Word format (with support from recorded online
interview). These transcripts in Microsoft Word format were reviewed again by the TSC research teamfor quality assurance. They were imported to QSR NVivo version 12 for analysis. Inductive coding wasapplied in order to read and interpret raw textual data to develop categories, concepts, and themes.
Through the inductive coding, content analysis then was used to identify important themes and patterns
that occurred in the text being analyzed by grouping together the developed categories or concepts
and then counting occurrences of the same categories, idea, or concepts.

16Chapter 3: Research Methodology

3.5.

Ethical Consideration

The TSC research team is well-versed on research ethics, including confidentiality andanonymity. All selected participants were informed about the overview of the research and asked togive their consent to participate in it. To obtain valid consent, the research used an introductory
statement at the start of each interview to ask permission from respondents/interviewees, as well as
another statement specifically seeking permission to record the online interviews. All completed records
were stored in a secure place during the process of data collection, data transcription, and data analysis.
Only people who were responsible for analyzing the data had access to the data and computer files. Alldata and information were strictly used only to serve the objectives of this research. For the purpose ofanonymity, during the process of data analysis and constructing the result of the research, theresearchers did not use the name of participants or institutions.

3.6.

Quality Assurance

Reliability and validity were the two key concepts used to improve the quality of evidences inthis research. To ensure the validity of data in this research, several techniques were employed:
1.

2.

3.

Triangulate information: In accordance with the research methodology employed in thisresearch, this technique was used in order to triangulate information from different stakeholders
who play a role in Cambodia’s tech startup ecosystem.
Develop tools: The data collections tools employed in this research were carefully developed
based on available literatures. In addition, the research team had also requested startup
specialists from TSC’s startup development office to provide feedback.
Conduct pilot-tests: A pilot test was launched with selected stakeholders prior to commencing
the actual data collection in order to check the quality and appropriateness of the research tool,and to receive feedback to further improve the research tool. The researchers reached to
stakeholders in their networks, asked for their consent to participate in the pilot testing and to
fill in the survey, and requested feedbacks in order to improve the questionnaires.

To ensure the reliability of the data in this research, all interviews and transcripts wereconducted by the research team. Transcripts were carefully checked by at least two members in the
research team to ensure the consistency of the voice and text.

3.7.

Scope and Limitations of ResearchThis research utilized the data and information collected from active actors within the techstartup ecosystem. Active actors refer to individuals or institutions who are still running their operations.
This research focuses on active actors in the ecosystem because collecting data from them would help
the research team in answering the questions posted in the research objectives of this research which
focused on understanding the current supports and challenges within the tech startup ecosystem. The
different categories of actors in the ecosystem as identified in this research can be found in Figure 3.3.
Great efforts were made by the research team from the preparation stage until the final stageof the research. However, there are still some limitations to this research as follows:•

Sampling method and generalization: Since the sampling frame of the tech startup ecosystem
was not available for drawing sample size, non-probability sampling methods were used to selectthe target group for the survey and the IDIs. The sampling methods used were a combinationof convenience sampling (respondents within the TSC and researcher networks) and snowball
sampling (respondents who introduced other startups or other stakeholders that could
participate in the research). Due to the fact that this research employed a non-probability
17Chapter 3: Research Methodology•

sampling method as well as having a limited number of target participants, the result of thisresearch could not be generalized for the entirety of the population within the ecosystem.
Data collection: Due to the fact that both the survey and IDIs were conducted during the
COVID-19 pandemic, there were no face-to-face interactions between the participants and theresearchers. This lack of interaction creates a low response rate as well as survey fatigue. Basedon the researchers’ observation, this could have stemmed from the fact that the stakeholders
in the tech startup ecosystem were busy and pre-occupied with their operations as well.

Startup
Development
Partner

Government
Institution

Investor

Corporate

Tech
Startup
Ecosystem
Association

Academic
Institution

Incubator/
Accelerator

Service
ProviderCoworkingSpace

Figure 3.3: The Actors in the Startup Ecosystem in Cambodia
Source: Authors (2022)

18

Chapter 3: Research Methodology

DEMOGRAPHICS AND CHARACTERISTICS

19

Chapter 4: Demographics and Characteristics

This chapter describes the demographics and characteristics of the participants who partook ofthis research. The information displayed here are excerpted from the results of the survey and IDIs oftech startups, investors, corporates, associations, incubators/accelerators, co-working spaces, service
providers, academic institutions, government institutions, and development partners.

TECH STARTUPS
96.9% of founders/co-founders in 65 different tech startups filled out the selfadministered online survey questionnaire.

Startup Founders/Co-Founders

42%

58%

95%

were Khmer founders/co-founders.

26

was the average age of founders/co-founders.

Tech Startups’ Profile
Prototype &Early-Operational
Stagesaccounted for 59%
surveyed tech startups.

Pre-Seed & Seed

were funding rounds that 48%
of surveyed tech startups are in.

45%

of

Surveyed tech startups were from the following sectors
Digital Marketplaces

27.7%

E-Commerce & Logistics

26.2%

Digital Media & Advertising

57%

91%

were in Phnom Penh.

15.4%

FinTech10.8%

HealthTech

were established from 6
months to less than 2 years ago.
have started operation forless than 6 months.

15.4%

EdTech

9.2%

AgriTech

7.8%

Tourism

7.8%

Development Services

7.8%

Transportation
IoTs & Hardware
Others

4.6%
3.1%
6.2%

Surveyed tech startups had the following business models

B2B2
C
43%

B2C
28%

B2B
25%

5-19

51% of surveyed tech startups reported
that they had between 5 to 19 members.

<543% of surveyed tech startups reported
that they have less than 5 members.

Eight tech startups partook of the IDIs. They are based in tech businesse-commerce and logistics, EdTech, HealthTech, AgriTech, transportation, IoT and hardware.
20

INVESTORS

Chapter 4: Demographics and Characteristic

Four surveyed investment companies were from FinTech,
EdTech, AgriTech, and transportation sectors.
One surveyed investmentcompany employed less than 5 staff.

5-10 Years

Two surveyed investment companies
employed from 5 to less than 20 staff.
One surveyed investment company
employed from 50 to less than 100 staff.

ALL

of

companies

thesurveyedprovidedequityinvestments, but

2-5 Years

investment

Early-Operational Stageand

was the most want-to-invest-in startup
stages, followed by operational as well
as scaling and expansion stages.

NONE

debt

of themprovided reward-based investment.

2 investment companies organizedawards competition for tech startups;

3

investmentcompanies

incubator/accelerator programs.

CORPORATESOut of three corporates, two of them wereinternational.

1

surveyed corporate focused on
automotive industry.

surveyed corporate has been
established for less than 2 years.

FinTechwas the sector that all surveyed
corporates focused on. However, at thesame time, two of those corporates
were also interested in supporting techstartups in other sectors as well.

2

surveyed corporates focused on
the finance and banking industry.

surveyed corporate has been
established for more than 10 years.

A majority of surveyed corporates focused or wanted to support
tech startups in thescaling and expansion

stages, followed by ideation and operational stages.
NONE of the surveyed corporates organized awards
competitions nor ran incubator/accelerator programs.

21

ran

ASSOCIATIONS
Chapter 4: Demographics and Characteristics

One association organized one awards competition, and one ran an
incubator/accelerator program for tech startups.
Focused Types and Want-To-Support Stages of Startups
thesurveyedassociations
Two Thirds ofemployedfrom 5 to less than 20 staff.
of the surveyed
exceeded 50 staff.

Noneassociations

67% Digital media & advertising
67% Development services

Surveyedassociations
were
homegrown business associations
and located in Phnom Penh.

All

83% FinTech

67% EdTech

67% Operational
50% Ideation
50% Scaling and expansion

Target Members

50%

Financial Institutions

50%

Civil Society Organizations

50%

33.3%
5 – 10 Years> 10 Years

Startups

66.7%

Investors

66.7%

Micro Enterprises

66.7%

Large Enterprises

16.8%

83.3%

SMEs

2 – 5 Years

100%

INCUBATORS/ACCELERATORS
A majority of surveyed incubator/accelerator were homegrown, and all
were located in Phnom Penh. Only one-third of the surveyed
incubators/accelerators organized awards competitions.
Target Industries

Tourism

54.6%

Finance & Banking

54.6%

Focused Types and Want-To-Support Stages of Startups

82% EdTech
73% AgriTech

E-Commerce & Logistics

63.6%

Agriculture

100%

55%

of the surveyed incubators/accelerators

A Majority were established in a range of 5 to 10
years ago.

22

FinTech, E-commerce
and logistics, IoT andhardware, & CleanTech
respectively

82% Operational
73%

Early-operational & Scaling
and expansion respectively

46%

Prototype

incubators/accelerators
A Majority ofhadthelesssurveyed
than 20 staff.

COWORKING SPACES
Chapter 4: Demographics and Characteristic

All of the surveyed coworking spaces have been established in Cambodia forless than 5 years, and the majority were homegrown.
Target Customers
Investors

Focused Types and Want-To-Support Stages of Startups

37.5%

NGOs

50%

Students

50%

Small Companies

75%

Startups

87.5%

71%
71%
57%

Digital media & advertising

57%

Digital marketplaces

57%

EdTechDevelopment Services

67%
50%
50%

E-commerce & logistics

Operational
Ideation
Scaling and expansion

SERVICE PROVIDERS
The majority of the surveyed service providers have been established in
Cambodia for less than 10 years and were homegrown.
Target Customers
Micro Enterprises
NGOs
Investors
SMEs
Startups
Large Enterprises

Focused Types and Want-To-Support Stages of Startups
50%
50%
50%
62.5%
62.5%
75%

80%

E-commerce & logistics

100%

Operational

20%

Entertainment & arts

80%

Scaling and expansion

20%

CleanTech

60%

Early-operational

20%

Construction

20%

Ideation

HALF of the surveyed service providers provided technology-related services to customers;
ONE-FOURTH provided accounting and taxation services, followed by legal services.

ACADEMIC INSTITUTIONS
Two out of four surveyed academic institutions organized awards competitions, andtwo ran incubator/accelerator programs for tech startups.
Types of Institution

Two
PublicTwo
PrivateLaboratory or Innovation Center

1 Homegrown
1 International

Two

Yes
One

No

23

GOVERNMENT INSTITUTIONS
Chapter 4: Demographics and Characteristics

HealthTech, EdTech,
AgriTech, CleanTech, &Tourism

were the sectors of tech startups that all surveyed government
institutions focused or wanted to support, followed by FinTech,
e-commerce and logistics, digital marketplaces, and manufacturing.

NEVER
organized any awards competitions, but Two ran

2/3

All surveyed government institutionsof the surveyed government institutions had
their own laboratories or innovation centers.

incubator/accelerator programs for tech startups.

Ideation, early-operational, & scaling were the most focused or want-to-support stages
for the surveyed government institutions.
and expansion

DEVELOPMENT PARTNERS
60% of the surveyed development partners claimed that technology andinnovation were their focus areas and 90% reported that all startups
including tech startups were one of their beneficiaries.
Development Partners’ Profile70%
of the surveyed development
partners have been established in
Cambodia for more than 10 years.

40%of the surveyed development partners
employed between 20 to less than 50 staff.

40%of the surveyed development partners
employed between 50 to less than 100 staff.

2 out of the surveyed development partners had their own laboratory or innovation centers.
Types and Stages of Startups that Development Partner Focused/Wanted to Support
E-Commerce & Logistics
CleanTech
Digital Marketplaces
Development Services
AgriTechTourism
HealthTech
Manufacturing
24

67%
56%
44.4%
44.4%
44.4%
44.4%
22.2%
22.2%

67% Ideation
67% Early-operational
67% Operational
56% Scaling and expansion
44% Prototype

Chapter 5: Key Findings and Discussion

KEY FINDINGS AND DISCUSSION

25

Chapter 5: Key Findings and Discussion
This chapter presents the key findings of the research that are produced from the quantitative
information (survey) and qualitative information (IDIs) found in this research. The key findings are also
reflected upon and discussed in tandem with the results of previous research studies, articles, journals,
books, and legislative documents. The key findings and discussion are organized and presented inaccordance with the objectives of this research: (1) to identify key challenges faced by tech startups inoperating their business and accessing support provided by ESOs; (2) to identify key challenges faced bytech startups in operating their business and accessing support provided by ESOs; and (3) to identify
opportunities perceived by each ESO on how to collaborate interactively in the startup ecosystem.

5.1.

Objective 1

5.1.1.

Challenges of Tech Startups in Operating BusinessOver 95% of startups had encountered challenges in operating their business operation at somepoint. The first major challenge as reported by those startups was a lack of funds. This issue mainly
stemmed from the challenges and difficulties in attracting investors, specifically with Cambodian
investors who have the tendency to be short-term focused without having any long-term goals.
Moreover, a correlation between gaining access to funding and the stage of which the business wascurrently at, as the research observed that startups that were in the later stages received the mostfunding, whereas startups that were in the ideation or prototype stages received no fund injection. In
contrast, startups in the ideation and prototype stages were not injected with any funding. As discussed
in the literature review, previous studies, focusing on the startup ecosystem in Cambodia, also found thelack of funds to be the biggest challenge for tech startups, mainly due to there being limited numbers ofangel investors, venture capitals, and crowdfunding. In addition, a combination of both the literature
review and the interview with ESOs found that investors did not want to invest in a startup at an earlystage which they perceived to be a high-risk investment.
The second major challenge was the lack of team members, both in terms of quantity andquality. Building and retaining a strong team was a significant challenge for tech startup founders sinceworking for a startup is considered to be a high-risk job, thus, perceived as a less attractive employment
opportunity. According to The Global Entrepreneurship and Development Institution, in 2018, Cambodia
was observed to have relatively low human capital and startup-related skills, receiving a score of lessthan 10 whereas other countries, such as Vietnam, Malaysia, Thailand, the Philippines, and Asia-Pacific allreceived a score of more than 15. There were insufficient talents with technical skills ranging from mid
to senior level in managing or executing a project. There may be a correlation between insufficienttechnical talents in managing and executing startup projects, and the low university enrollment rate for
STEM majors (Cambodia Academy of Digital Technology, 2021) and the lack of talents withentrepreneurial and technical skills (Ek, 2017; Srang, Taing & Kuok, 2021; Swisscontact and Impact Hub
Phnom Penh, 2021).
The third major was the lack of support from other stakeholders. Support from ESOs in theecosystem is inevitably vital to tech startups who faced an increased risk of failure due to the lack offunds, knowledge and experiences. The perception that the tech startup ecosystem in Cambodia
remained young and fragmented was reinforced through the interviews with ESOs within the ecosystem.
It should be noted that the number of ESOs within the ecosystem has been growing steadily overtime,showing a positive growth within the ecosystem. However, there remained the issue of
miscommunication among ESOs within the ecosystem as each ESO generally operates within their own
interests and agendas in mind, sometimes creating a conflict of interests among one another. Beside thethree major challenges, all challenges in operating business faced by tech startups who participated in
the survey are as follow:
26

Chapter 5: Key Findings and Discussion
•
•
•
•
•
•
•
•
•
•
•

Lack of funds (67.7%)
Lack of team members (36.9%)
Lack of supports from other stakeholders (32.3%)
Lack of business knowledge and skills (29.2%)
Lack of experience in operating startups (24.6%)
Lack of technology-related knowledge and innovation (23.1%)
High cost of production (15.4%)
High number of competitors (12.3%)
The product or service does not meet the quality and standard requirements (10.8%)
The product or service does not align with the current market demand (10.8%)
The cost of customer acquisition is expensive (10.8%)

5.1.2. Support of ESOs in the Ecosystem Accessed by Tech Startups
This research found that over 95% of tech startups received, at minimum, support from one
ESO within the tech startup ecosystem. Moreover, the research found that three out of five techstartups received support from three different types of ESOs, and there were no one startup thatreceived support from all nine different types of ESOs that were categorized in this research. A few of
the tech startups that participated in the IDIs noted that they received quality supports from one or two
ESOs within the ecosystem which enabled them to progress further forward. The data collected also
revealed the differences in the relationship and connection between tech startups and ESOs within theecosystem in the periods before and after 2015. This reflects the fact that the tech startup ecosystem
in Cambodia had only garnered significant attention in recent years leading up to this research. In theory,
if tech startups can increase the number of ESOs who they can engage with and receive support from,then the level of interactivity and vibrancy within the tech startup ecosystem would also increase as
well. In theory, if tech startups can increase the number of ESOs who they can engage with and receive
support from, then the level of interactivity and vibrancy within the tech startup ecosystem would also
increase as well.

27

Chapter 5: Key Findings and Discussion

Incubators/Accelerators

63.1%

Associations

41.5%

Investors

36.9%

Coworking Spaces

33.9%

Corporates

30.8%

Academic Institutions

30.8%

Government Institutions

27.7%

Development Partners

20%

Service Providers

16.9%

Figure 5.1: Percentage of Tech Startups in Accessing Supports from Each Type of ESOs
Source: Authors (2022)
The figure above depicts the different types of ESOs within the tech startup ecosystem thatprovide supports to tech startups. The most support received by tech startups was found be fromincubators/accelerators, followed - respectively and in order – by associations, investors, coworking
spaces, corporates, academic institutions, government institutions, development partners, and service
providers. It is evident that incubators/accelerators play a major role in developing startups in Cambodia
as reflected by the finding of this research that they provided the most support to tech startups within
the ecosystem. Incubators/accelerators partly contribute to the growth of startups in Cambodia, withseveral incubation programs organized and designed to nurture and grow a certain number of startups
to become viable. This research found that 164 tech startups had participated in the programs organizedby the surveyed 11 incubators/accelerators.
Out of all the ESO categories, service providers were found to have provided the least support
to tech startups, with different reasoning cited by the participating tech startups and service providers.
7 out of 10 tech startups that partook in this research had not reached an operational stage at the timeof the survey. At this stage, the tech startups reported that they neither needed the services offeredby the service providers, nor did they have the sufficient budget to purchase these services. There are
two reasons as to why service providers have not provided any service or product to tech startups. The
service providers could neither find a suitable startup to work with, nor were their service fees
affordable for the tech startups. However, data gathered from IDIs revealed that support from service
providers are beneficial in the prototyping stage, as well as for executing and managing administrative
tasks, such as financial reports and taxations.

28

Chapter 5: Key Findings and Discussion

5.1.3.

Types of Support Received by Tech Startups from ESOs and the Challenges

Startups that participated in this research were asked to list and describe the forms of support
they received from each ESO. The list below presents the most common forms of support received bytech startups in order of their occurrence frequency:
•
•
•
•
•
•
•
•
•
•
•
•
•

Mentoring (how to run a business)
Network building
Incubator/accelerator program
Funding and investment capitalAwards competition
Technology-related and innovation-related support
Free Membership/free office space/free service or special fee
Connection to investment opportunities
Internship programs
Exchange programs or visits
Testing tools or laboratory
Joint Venture
Tax incentives

Incubator/accelerator program is an ideal environment for startups to build and establish
network with relevant people who can provide support, as well as for startups to find mentors orcoaches. In addition, these supports are crucial in providing guidance and supports for startups that are
still in an early stage. However, this research, as well as the studies that came before it, found that there
is a lack of experienced mentors who are experts and capable of operating and managing a startup. The
paragraph below describes the most common forms of support as well as the most common challenges
faced by tech startups in receiving support from each category of ESO.
The paragraph below describes the most common forms of support as well as the mostcommon challenges faced by tech startups in receiving support from each category of ESO.

Incubator/
Accelerator

The most common form of support from incubators/accelerators, as reported byparticipating tech startups, is mentoring on the operational process of running astartup. Moreover, the surveyed startups also reported that the challenges they faced
in receiving supports from incubators/accelerators, include the lack of technical skills,
funding, team members, as well as the lack of time to participate in the programs. In
addition, there were also issues with regards to the program itself, such as the lengthof the program, the lack of clear guidance during the program, as well as the lack of
post-program supports. The surveyed tech startups also raised the issue that the
mentors with the programs lack adequate experience in operating and managing
startups, thus, this made it difficult for the tech startups to keep on track and to catch
up with the programs as they were unable to properly grasp and understand newconcepts and terminologies.

The most common form of support that tech startups received from associations
was via incubator/accelerator programs. In receiving this form of support fromassociations, the surveyed tech startups also noted two challenges: 1) the lack oftime to participate in the programs offered by associations; and 2) the lack of funds,

Association
29

Chapter 5: Key Findings and Discussion
or the inability to allocate funds to acquire a membership. Moreover, they also
added that the connections and networks provided by associations were neither
broad nor diverse, hence, the tech startups still struggled with finding and acquiring
partners who share common goals. Furthermore, the participating tech startups also
noted that the commitment and mentoring support that they received fromassociations did not fulfill their needs.

Investor

Investors commonly provide support to tech startups in the form of investment
funds. However, the participating tech startups reported that they have a limited
knowledge in financial management, hence, they found it challenging to manage thefunds they received from investors.

Surveyed tech startup reported that the most common form of support that theyreceived from coworking spaces was through receiving free office space or
receiving a special fee. With regards to the challenges faced in receiving this formof support, the surveyed tech startups reported that they faced difficulties inallocating time to work at the provided coworking space due to external job
commitments, thus, were unable to fully commit to operating their startups. They
also added that the provided coworking spaces were located in places that
required long commutes, as well as being small in size, having insufficient rooms andfacilities to support the operation of startups. They continued that there were asmall poll of startups and other ESOs in coworking space, resulting small network
connection to build and exchange ideas.

Corporate

Corporates, as reported by surveyed tech startups, also provided support to techstartups in the form of incubator/accelerator programs. The surveyed tech startups
also noted the difficulties in working in corporate buildings, limitations on flexibility
when it comes to prototype and product testing, insufficient resources, and too
many reporting requirements.

Academic institutions provided support to tech startups in the form of mentoring
and guidance on how to operate a business. Still, the surveyed tech startups reported
that they lacked the funds, marketing knowledge, and technical skills needed tooperate their business. Moreover, the curriculums provided by academic institutions
were insufficient and non-holistic, and the learning resources or materials on thesubject of startups in Khmer language were limited. Mentors provided by academic
institutions had insufficient experience with regards to tech solutions, and the training
and mentoring periods were short. The participating tech startups also received anumber of interns from academic institutions, but a portion of the interns had limited
knowledge and skills relevant to the operation of a startup.

30

CoworkingSpace

Academic
Institution

Chapter 5: Key Findings and Discussion

Government
Institution

The most common support as received by tech startups from government
institutions were through awards competitions and network building. The surveyed
tech startups perceived awards competitions and funding to be the most commonand helpful form of support provided by government institutions. However, thechallenges that the tech startups faced in receiving this form of support were thelack of support in terms of technical knowledge and skill in building prototype, thelimited or absence of prize money in some awards competitions, the difficulties incommunicating with some units within government institutions, and the lack ofopportunities to enter regional competitions and events. It is also interesting to notethat the tech startups also reported that some public fees, such as businessregistration and licensing, were expensive.

The most support tech startups received from development partners was networkbuilding. The challenges in receiving support were the technical problem of sandbox
testing and lack of time to participate in programs or events of development
partners. Other challenges were lack of trust, common goals, long-term partnershipand sustainability, and flexibility on how to use the fund. Reporting document
requirement from development partners was also considered a huge burden bytech startups.

Service
ProviderDevelopment
Partner

Technology-related and innovation-related supports were reported to be the mostcommon form of support provided to tech startups by service providers. Techstartups reported some challenges when receiving supports from service providers,
including the lack of clarity in the ideas or strategies proposed by the service
providers which could not be implemented in real-world operations, and the lackof experts in specific areas who they could work with. In addition, some services or
products provided by service providers were inadequate in terms of both quality
and quantity.

In summary, the challenges faced by tech startups in receiving supports from ESOs in theecosystem can be categorized into two main factors: internal and external. There are six common
challenges that can be categorized as internal factors, or factors stemming from tech startups
themselves, including limited funding, lack of technical skills, and insufficient time allocation. External
factors, or factors stemming from ESOs, also comprise of three common challenges, including inadequate
mentoring quality, lack of learning resources and laboratory facilities, and complex reporting
requirements.
Internal factors:••

Funding: A number of tech startups could not afford to purchase certain specific materials
to use in product development or prototype testing as well as in their business operation.
Moreover, due to their very limited budget, these tech startups were unable to allocate any
budget to pay any membership fee to any associations, or any service fee to any service
providers.
Technical skills: A number of tech startups had limited knowledge with regards to advanced
technologies, thus, they were limited in their ability to refine and innovate their products
31Chapter 5: Key Findings and Discussion•

and services using advanced technologies. Moreover, some tech startups did not have thenecessary skills needed to operate a business, such as financial management, marketing andbranding.
Time allocation: Some tech startups reported that they could not allocate adequate time tofully commit to working for a startup due to prior commitments and other priorities.

External factors:
•
•

•

5.2.

Mentoring quality: A number of mentors had limited skills and experiences to support techstartups and provide unclear instruction or guidance that could not help them much.
Resources/facilities: A majority of ESOs did not have adequate learning materials, equipment,
and facilities to support tech startups during the phases of prototype development andtesting, which in turn limited the opportunities for tech startups to successfully develop
market-fit products.
Reporting requirements: Tech startups receive funding from ESOs found that the processof reporting documents was highly complex and that there were stringent requirements anda strong demand to fulfill some key performance indicators.

Objective 2

5.2.1. Supports Provided by ESOs to Tech Startups and the Challenges
This research found that 77.2% of the surveyed ESOs provided or had been providing support
to tech startups. The types of support provided varied from one ESO to another. The list below presents
the most common forms of support provided by all ESOs in order of their occurrence frequency:
•
•
•
•
•
•
•
•
•
•
•
•
•

Network building
Mentorship (how to run business)
Connection to investment
Technology-related and innovation-related support
Investment (funding + capital)
Incubator/accelerator programs
Exchange programs or visits
Provision of products or services to tech startups
Provision of testing tools or laboratory
Internship programsAwards competition
Free membership or special fee
Educational training to tech startups

Network building was found to be the most common form of support provided by ESOs totech startups. Some ESOs have noted that the startup community had been growing and expanding
rapidly, allowing people to better connect with one another which had led to an increase of one-to-one
referrals, and consequently, a strong culture of network building within the ecosystem. It should be notedthat networking is crucial as both an interpersonal skill of an individual - in this context, the startup
owners and operator - as well as a form of support from those within the ecosystem. In the early stages,
startups typically want to center their focus and efforts around building prototypes or MVP of theirproducts or services rather than allocating time and other resources into building a network. However,32Chapter 5: Key Findings and Discussion
overtime as the startups experience growth and expansion, they would need to divert resources into
establishing and building a beneficial and supportive network within the ecosystem.
This also reflects upon the fact that mentoring – on the operation and management of a business- is the second most common form of support, partially due to the influences of the growing startup
community as well as the mindsets of the people within it. People with prior entrepreneurial experiences
are beginning to share their experiences and becoming mentors to budding startups. This is in line withand reflects upon the aforementioned finding that mentoring is the most common form of support thattech startup received from ESOs. However, previous studies by Ek (2017) and Kem et al. (2019) foundthere are still a lack of experienced mentors. In the Impact Report by Impact Hub Phnom Penh (2018), it
was found that there were more than 35 mentors who were passionate in supporting Cambodia’s startup
ecosystem.
Connection to investments was found to be the third most common form of support provided
by ESOs. This also reflects upon the growth of the startup community and the strong network building
culture within the community, both of which gave rise to more opportunities to connect and receive
investments. The more exposure that tech startups have to ESOs, especially to investors or corporates,
the more opportunities they have to showcase or pitch their products or services in order to garnerinvestment funding.
The paragraph below describes the most common types of support and challenge ESO faced inproviding support to tech startups. The information is presented in same ordering sequences of ESOs in
section 5.1.3.

Incubator/
Accelerator

The most common form of support which incubators/accelerators provided totech startups were through providing connections to investments, mentoring, andnetwork building. The challenges for ESOs in providing this form of support varies
greatly. However, incubators/accelerators found it challenging when it came torecruiting suitable startups to participate in programs. Moreover, they also lack thenecessary resources and mentors to provide ongoing support to those startups. The
lack of proper a network was another challenge faced by incubators/accelerators.
Furthermore, another notable challenge faced by incubators/accelerators was thehigh rate of program dropouts, especially due to insufficient cashflows and technicaltalents on the side of the tech startups. In certain cases, some tech startups werereluctant to take part in the programs due to concerns over intellectual property
rights.

The most common form of support provided to tech startups by associations werementoring on the operation and management of a business, as well as opportunities
for network building. The challenges in providing these supports were mainly a lackof funding as well as the lack of commitment and participation from the techstartups due to prior and external work commitments. Moreover, the lack ofsupport from the government as well as the limited public awareness regarding theworks of associations, had led to issues of scarce resources and engagement rate,further creating difficulties for associations to provide support to the tech startups.

Association

The most common form of support provided by investors to tech startups was also
mentoring on the operation and management of a business as well as opportunities for
network building. The challenges that investors face when providing support to the tech
Investor

33

Chapter 5: Key Findings and Discussion
startups was mainly the lack of performance tracking in order to monitor and evaluate
the funds that were invested. Moreover, there was also a lack of follow-on funding
from investors, hence, no additional funding or support was provided to the techstartups at a later stage. However, investors have claimed that the tech startups did notprovide their complete financial reports, as well as lacking a proper accounting system
and lacking the knowledge with regards to financial statements. It should also be notedthat investors were also reluctant to invest in startups that were unwilling to formallyregister themselves. In addition, startups that based their business model on a long sale
cycle, created inherent difficulties for investors to provide support and investments.

The most common form of support provided to tech startups by coworking spaces
were working spaces and facilities, as well as connections to investment
opportunities. The critical challenges in providing these supports were the lack ofprototyping facilities and equipment, as well as the lack of mentoring, financial andtechnical supports. It was also reported that coworking spaces found it difficult toengage with certain startups that lack the commitment to manage and operate theirstartups fulltime. The lockdown measures during the Covid-19 pandemic also
caused problems which resulted in a limited number of startups operating at
coworking spaces, in addition to the growing preference of some startups to work
remotely from home.

Academic
Institution

The most common form of support provided by academic institutions to techstartups were through the offers and provisions of specific degrees and courses, aswell as opportunities for network building. The challenges in providing these
supports were the lack of resources, especially, human resources who could assist
and provide support to the tech startups, the lack of students who were able andwilling to participate in startup-related programs, and the limited level of digital skills
and knowledge among the student population. Moreover, academic institutions also
noted that the lack of courses related to business technology was also an obstacle
for them when it came to providing support to the tech startups.

Government institutions provided support to tech startup in the forms ofinvestment opportunities and through incubator/accelerator programs. The
challenges in providing these supports were the lack of big-ticket investors who
could support the burn rate of the tech startups, the lack of physical infrastructures,the lack of funding, and the lack of cooperation. Moreover, the lack of innovative
tech startups and talents was also cited as a challenge by government institutions
as well.

Development
Partner
34

CoworkingSpace

Government
Institution

The most common form of support provided to tech startups by development partners
were through providing funding and opportunities to build networks. The challenges
faced in providing these supports were the existence of similar programs being ran bymultiple development partners, the gaps between rural and urban youths in terms ofaccessing opportunities, the lack of technical expertise and knowledge, the difficulties

Chapter 5: Key Findings and Discussion
faced in recruiting startups to the participate in programs, and the dropout rate fromthe programs.

Service providers provided supports to tech startups most commonly in the formof technology-related and innovation-related support as well through mentoring on
the management and operation of a business. The challenges faced in service
providers faced in providing support to the tech startups were the lack of resources
to support the tech startups, issues with virtual communication, and non-profitable
return on investments when providing funding for startups. Another notablechallenge that was raised was regarding the fact that the tech startups have manyideas, but lack a starting point and a direction forward.

Service
ProviderThe types of support provided to tech startups by ESOs varied greatly, which can be seen as areflection of the diverse nature of the tech startup ecosystem. These different types of support fromdifferent types of ESOs would allow startups to grow and make progress in their respective journeys.
Nevertheless, there were challenges faced by ESOs, as described in the section above, when it came toproviding support to tech startups, and could be categorized into internal and external factors. Theinternal factors (factors stemming from the ESOs themselves), include insufficient funding, inadequate
quality and quantity of mentors, and the lack of resources/facilities. The external factors (factors
stemming from the tech startups), include the lack of quality startups, insufficient time and commitment,
and lackluster fulfillment of reporting requirements.
Internal factors:•••

Funding: ESOs reported that they had limited funding to support tech startups, and in somecases, the amount of funding was insufficient in allowing the tech startups to develop or
test their product or service prototypes. In other cases, there were ESOs that were able toprovide seed funding to the tech startups. However, they were unable to provide followon funding to support those tech startups as they began to grow and scale up.
Mentors: Some ESOs observed that the number of mentors had been increasing as ofrecent. However, this number is still not enough to meet the demands due to the increasing
number of incubator/accelerator programs that are being launched. This also gave raise toconcerns with regards to the quality and expertise of the mentors as well.
Resources/facilities: ESOs were still unable to provide sufficient material support to techstartups, specifically in terms of testing and laboratory equipment, as well as a sandbox
environment for startups to develop and test their service or product prototypes.

External factors:••

Quality of startups: A majority of ESOs reported that there was a limited number of quality
tech startups, with most of them only having limited knowledge and skills in terms of business
operation and management, as well as technology and innovation. This consequently
contributed to the high dropout rate of tech startups from several programs.
Time allocation: Some ESOs have observed that a number of tech startups did not or wereunable to devote their time to participate in offered programs due to a stronger
commitment and focus on managing and operating their businesses, as well as due to prioror external commitments, for instance, commitment to a fulltime job.

35

Chapter 5: Key Findings and Discussion•

Reporting requirements: A majority of ESOs that provided support to tech startups reported
that there were inadequate fulfillments of reporting documents on the part of the techstartups, including fulfillment of financial reports and statements, in addition to the failure to
maintain and accomplish key performance metrics as set by the ESOs.

5.3.

Objective 3

5.3.1.

Connection Among ESOs in the Ecosystem

Connection, in this context,
referstothecommunication,
5
participation, and interaction among
4
4
ESOs within the ecosystems. The use of3
33
connection here refers strictly to ESOs,
22
2
and exclude activities involving techstartups. The survey found that 86% of
ESOs had participated in events orprograms related to tech startups,
organized by one or more ESOs within
the ecosystem. In Figure 5.2,
Incubators/accelerators were found tobe the category of ESOs with the mostparticipations in tech startup-related Figure 5.2: Participation of Each Actor in Tech Startup-related Events
events (an average of 5 ESOs), followed Organized by Other ESOs
Source: Authors (2022)
respectively by coworking space (an average of 4 ESOs) and government institutions (an average of 4
ESOs). Associations, corporates, and academic institutions were found to have the least participations intech startup-related events (an average of 2 ESOs each).
Data from the IDIs revealed that the connection between ESOs has improved overtime intandem with the growth of the ecosystem. The connection and communication among ESOs within theecosystem could be perceived as vibrant and lively. In other words, ESOs were actively participating or
getting involved with startup-related events hosted or organized by other ESOs within the ecosystem.

5.3.2. Opportunities for ESOs to Collaborate
All ESOs that partook in the survey were asked to identify the opportunities in which they could
work or collaborate with one another. The opportunities, or activities as identified by the ESOs, can beclassified into six different categories as follow:
1. Capacity Building•••

Exchange knowledge and experiences
Provide mentorship to tech startups who participate in programs of ESOs
Assist tech startups in accessing free tools for the purpose of testing, or free services fromother ESOs

2. Startup Formalization
•
•
•

36

Work with other ESOs to identify and build potential tech startups in Cambodia
Work with other ESOs to develop startup-friendly policies and investment regulations
Work with other ESOs to help tech startups with the formalization and due diligenceprocesses

Chapter 5: Key Findings and Discussion
3. Talents and Human Resources•••

Collaborate with other ESOs in the development of tech talents, entrepreneurs, andinternship programs
Connect tech startups to ESOs when they need talents or seek to tender service providers
Contribute to the development of curriculums related to technologies, startups, orentrepreneurship

4. Investment Growth•••

Reinforce the implementation of responsible investment and the public-private partnership
modelWork together with ESOs to develop investment criteria that fit with the nature of techstartups in Cambodia
Work with other ESOs to initiate demo days, pitch days, or investment pitch programs on aregular basis

5. Business Support••

Provide products/services to other ESOs or purchase products/services provided by them
Collaborate with other ESOs to work on competitive pricing of products or services
provided by tech startups

6. Events and Research••

Co-organize or participate in events related to technology, startup, or entrepreneurshiporganized by other ESOs
Co-conduct or participate in research on technology, startup, or entrepreneurship

Figure 5.3 illustrates the key activities perceived by ESOs in the tech startup ecosystem asopportunities to collaborate in order to support tech startups and improve the ecosystem.

37

38
Academic
Institution

Opportunities
for Working
TogetherInvestor

CoworkingSpace• Link tech startups to ESOs for networking• Invite ESOs to be mentors or share their experiences
and knowledge• Work with ESOs to identify and build potential techstartups• Co-organize or participate in events related totechnology, startup, or entrepreneurship• Work with ESOs to initiate demo day, pitch day, orinvestment pitch programs on a regular basis• Exchange knowledge and experiences.
• Connect startups to provide talents and/or tenderservices to ESOs
• Work with ESOs to identify potential tech startups• Gather voices to improve policy and regulation including
startup-friendly policies development, practices of PPP
approach, responsible investment, and corporate
venturing• Collaborate with ESOs to work on competitive pricing
of tech startups’ products/services• Exchange knowledge and experiences• Work with ESOs to identify and build potential startups• Co-organize or participate in events related to technology,
startup, or entrepreneurship• Co-conduct or participate in researches on technology, startup,
or entrepreneurship• Purchase ESOs’ products/services• Work with ESOs to prove that a coworking space is a good spacefor startups• Connect startups at coworking spaces to provide talents or tenderservices to ESOs
• Provide rental space or venues to ESOs
• Invite ESOs to participate in events related to technology, startup, or
entrepreneurship• Work with ESOs to identify and build potential startups•

Incubator/
Accelerator

Association

Corporate

Figure 5.3: Opportunities for ESOs
to Collaborate
Source: Authors (2022)

Service
ProviderDevelopment
Partner

Government
Institution• Provide products/services to tech startups who participate or involvein programs of ESOs
• Exchange knowledge and experiences• Connect startups (their customers) to ESOs
• Work with other ESOs to identify and build potential startups• Work with other ESOs to help tech startups in the formalization anddue diligence processes• Collaborate in the development of curriculum related totechnologies, startups, or entrepreneurship• Collaborate in the development of tech talents andinternship programs• Invite ESOs to share knowledge and experience• Help students and startups to access investment funds,
free tools, and coworking spaces• Connect students and startups to the networks of ESOs

• Work with ESOs to develop startup-friendly policies and• Work with ESOs to develop startup-friendly policies andinvestment regulations• Reinforce the implementation of responsible investment
and the public-private partnership model• Work with ESOs to identify and build potential startups.
• Purchase ESOs’ products/services• Co-organize or participate in events related totechnology, startup, or entrepreneurship• Exchange knowledge and experiences• Work with ESOs to develop startup-friendly policies• Connect startups to provide talents and/or tender services to
ESOs• Work with ESOs to help tech startups in the formalization anddue diligence processes• Work with ESOs to identify and build potential tech startups• Work with ESOs to develop investment criteria and initiate demoday, pitch day, or investment pitch programs on a regular basis• Raise awareness and demand a standard for responsible investment
from investors• Share investment criteria to tech startups who participate in ESOs’
programs• Connect startups to provide talents and/or tender services to ESOs

Chapter 5: Key Findings and Discussion

Chapter 6: Conclusion and Recommendations

CONCLUSION AND RECOMMENDATIONS

39

Chapter 6: Conclusion and Recommendations
This chapter aims to summarize and conclude the key findings of the research in accordancewith the research objectives. Based on the conclusion of the research, by research objectives, the key
recommendations are produced for tech startups and ESOs to work on in order to accelerate techstartup ecosystem development in Cambodia. The three sub-sections below sequentially respond to thethree research questions.

6.1.

Challenges Faced by Tech Startups

Almost all tech startups encountered challenges in operating their businesses and three in fivetech startups announced that they had challenges in receiving support from ESOs in the ecosystem. It isa fact that there are difficult days, hard times, and stressful periods in running a business; some challenges
can be prevented, but some are not avoidable. Therefore, tech startups have to be optimistic andstrategic to thrive, no matter what conditions and challenges they face. Optimism is a psychological trait
or strength possessed by hope and confidence in success and a positive future. Cutler (2015) outlined a
few benefits of optimism that can bring when running a business, including seeing failure as a new startand keeping moving, being far-sighted to consider new options and change businesses for the better,
improving both physical health and mental well-being, and spreading good vibes to inspire teammembers. It is recommended for tech startups to be optimistic and the following recommendations will
improve their optimism:••

Tech startups should minimize the negative thoughts by identifying and replacing them withpossible solutions.
Tech startups should improve their time management by using the urgent and importantmatrix to prioritize their to-do lists.

The first major challenge reported by tech startups in operating their business was the lack offunds. Most tech startups bootstrapped their business with their savings. However, without sufficient
funds to execute their business ideas, it is quite challenging for startups to scale up their businesses. It isdifficult to build a vibrant and healthy startup ecosystem when most startups are struggling to raise funds
or get loans to execute their ideas, and when there are only a few successful startups in the ecosystem.
The lack of funds did not mean that all tech startups did not receive any funding or investment capital,
but just that those funds were limited and insufficient. It is a fact that when tech startups were in theideation and prototype stages, their chances of receiving investment fund were low, compared to those
who were in later stages. Therefore, more pitching opportunities should be available for tech startups,
in particular those in the ideation and prototype stages. Therefore, the following recommendations arefor ESOs:••

ESOs should co-organize investment pitch series regularly to allow tech startups to pitch toa large pool of investors.
ESOs should co-produce TV series on investment pitches to increase opportunities for techstartups to receive investment.

Mentoring is the most common form of support that tech startups received from other ESOs.
However, the quality of mentoring remains a point of skepticism for tech startups, as they noted thatmentors did not have sufficient experience in managing and operating startups, tech solutions, andbusinesses. Therefore, the support provided by those mentors could not fulfill their needs. In addition,some ESOs mentioned that great mentors are difficult to find, particularly those who are experienced
industry veterans. Some ESOs argued that volunteer mentors might not fully dedicate their time andefforts to help and guide startups, whereas paid mentors are incentivized to do so. There is still a big
discussion regarding mentors, in particular the quality of mentoring. However, there are more and more

40

Chapter 6: Conclusion and Recommendations
mentors in Cambodia as the actors in the ecosystem have been tapping into the circles of their networks,
including professional colleagues, friends, and other professional groups to refer mentors for specificmentorship programs. It is recommended that:•

6.2.

ESOs should select and invite high quality mentors to support tech startups.

Challenges Faced by ESOs

It is quite challenging to provide support, in particular incubator/accelerator programs or any
specific programs to tech startups when they are not fully committed to participating. Some programs
are pretty demanding and require tech startups to devote their time and efforts to develop and refine
their products or services or fulfill other requirements. However, ESOs perceived that some techstartups considered this a heavy burden and did not fully commit themselves into doing so.
Incubators/accelerators and development partners claimed that one of the challenges in providing
support to tech startups is the dropout rate of startups from programs due to their lack of technicalexpertise and time. In addition, investors also reported that tech startups that received their investment
funds did not fulfill the reporting requirements. In order to improve the quality of support provided by
ESOs, it is recommended to tech startups:••

Tech startups should be ready for the time commitment to the whole process of
incubator/accelerator programs or other programs.
Tech startups should seek support and guidance in fulfilling the reporting requirements fromother startups who are experienced receiving investment funds from investors or financial
support from other ESOs.

There was a big number of tech startups in the research; over 80% of them did not receive
any support from service providers. There are a few reasons which kept tech startups and service
providers distant and less connected. One of the key factors was the service fee charged by service
providers. Meanwhile, some ESOs who provided financial support to tech startups claimed that techstartups could not fulfill the reporting requirements. In this sense, there is another possibility to introduce
some ESOs to be an intermediary connecting tech startups and service providers. The ESOs should hire
service providers as a tender or have an agreement with service providers in part of a memorandum of
understanding (MoU) to support tech startups, especially in fulfilling the reporting requirements. The
following recommendations are presented specifically for ESOs:•

ESOs should collaborate with service providers to assist tech startups in building theircapacity in reporting document preparation, especially with regards to financial statements.

Tech startups were appreciative of the ESOs who provided them with financial support,
especially funding and investment capital. However, they perceived that fulfilling the reporting
requirement was a heavy and complicated process. The reporting requirements are mandatory because
the ESOs need the reporting documents for legal purposes. Reporting documents can also show thetransparency and accountability between activities and expenses. With this, ESOs can keep track of the
progress, improve quality, manage risks, and build trust. Reporting requirements are inevitable as long astech startups receive funding from ESOs. However, the reporting process can be simplified andstandardized so that tech startups will find it easier. It is recommended for ESOs:•

ESOs should collaborate with service providers to simplify the process and develop or use
digital tools for reports and documents submission.

41

Chapter 6: Conclusion and Recommendations

6.3.

Opportunities for ESOs to Collaborate

A majority of ESOs mentioned that the tech startup ecosystem in Cambodia has been growing
rapidly in the last few years, particularly during the Covid-19 pandemic with more actors or players
coming into the ecosystem, but it is still relatively small compared to the ecosystem in developed
countries. Even though the size of the ecosystem is not big and some actors have different paths ordirections, ESOs know each other very well and share a common goal to create a healthy and robust
ecosystem in Cambodia. The positive signs of ESOs' collaboration in the ecosystem are proven by the
big number of events and programs organized by incubators and accelerators with support from other
ESOs. Corporates, development partners, and the RGC typically provide financial support. The technicalsupport and mentoring support were given by investors, service providers, academic institutions, andother mentors in the ecosystem. Coworking spaces normally co-organize or sponsor venues for those
programs or events. Another remarkable situation was the government had been working rigorously andaggressively in recent years, especially during the Covid-19 pandemic to promote technology, innovation,and startups. This indicates that Cambodia’s tech startup ecosystem is ready for expansion, and that it
is essential to add more players for diversification and growth. Therefore, it is recommended for ESOs:••

42

ESOs should identify new actors or players in the ecosystem and involve them in any
relevant events or programs to support tech startups and the ecosystem as a whole.
ESOs should organize knowledge-sharing or conference on regular basis to rigorously stay
current with the activities, progresses, and achievements of each actor in the ecosystem inorder to build collective knowledge and explore better ways of achieving a healthy
ecosystem in Cambodia.

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44About Techo Startup Center

Contact Us

Techo Startup Centre (TSC) is a public administrative institution
under the guardianship of the Ministry of Economy and Finance.
Its mission is to nurture startups to grow into successful
businesses by enhancing talents, entrepreneurship, andinnovation capacities through well-supported programs. To
achieve the mission, TSC has implemented several key activities
including accelerator programs, research studies, Khmer
Agriculture Suite (KAS) platform, cleantech program, and Online
Business Registration running through Cambodia Data Exchange(CamDX).

Hotline: +855 81 922 329
Email: info@techostartup.center
Website: www.techostartup.center

Contact Us
Hotline: +855 81 922 329