This is where the Cambodian startup ecosystem is in 2015

In 2013, when Tech in Asia last had a closer look at startups in Cambodia, we found a small but tight-knit community, and a handful of promising startups and digital businesses.

Barcamps were – and still are – attracting thousands of participants. Startup Weekends have been held regularly in Cambodia since 2011, and there were a number of co-working spaces in Phnom Penh and Siem Reap. Cambodia’s startup scene also already had its own publication, Geeks in Cambodia, which offers content in both Khmer and English.

But despite the visible enthusiasm, local startups with sustainable business models and growth are still rare in 2015.

Tech in Asia spoke with two experienced observers of the Cambodian startup ecosystem – Adrienne Ravez, editor of Geeks in Cambodia, and Chris Brown, initiator of Phnom Penh’s first co-working space Colab and co-founder of two tech companies, Aruna Technologies and Mango Maps. We discussed factors that are still holding Cambodia’s tech scene back, as well as opportunities ahead.

Demographic and cultural barriers

One of Cambodia’s serious disadvantages from an entrepreneurial perspective is its relatively small population. With just a little over 15 million people, Cambodia’s domestic market is tiny – compare that to Vietnam’s 90 million, Thailand’s 65 million, not to mention Indonesia’s 250 million people.

An additional barrier is the Cambodian language, Khmer. Creating content in the local language is complicated: try finding a keyboard that allows easy typing of Khmer characters.

“To be successful, Cambodian entrepreneurs have to look beyond Cambodian borders from the start. In this sense, it’s similar to Singapore,” says Brown. But unlike Singaporean entrepreneurs, who grow up in an English speaking environment, Cambodians have to first overcome language barriers in order to be able to address international markets.

Tech scene funding through development funding

Cambodia’s GDP has been steadily growing, but still ranks low compared to its Southeast Asian neighbors. Cambodia is famous for its high “NGO-density” – a lot of development aid money has poured into the country since the 1990s.

Recently, development aid funds have become active in the world of tech. Phnom Penh has two “tech incubators” whose DNA is rooted in aid work, not entrepreneurship: The Development Innovations program funded by USAID has been going since 2014, and Impact Hub opened in April 2015.

It’s still too early to say whether these programs will give rise to scalable social enterprises with long-lasting impact.

Brown remains sceptical, because these programs lack the entrepreneurial experience regular startup incubation and acceleration programs normally bring in.

Ravez is more optimistic because she sees a niche in Cambodia for social entrepreneurship. In her eyes, a social impact oriented approach could work better in the Cambodian context than a Western approach to startup breeding.