The year 2024 has been another eventful year at Beacon VC. This year we have channeled our energy to continue being a vibrant member of the Thai and Southeast-Asian startup community. With several programs aiming to enhance business capability of Thai startups ranging from offline training course on ESG to mentorship program, Beacon VC was recognized by Techsauce as the Startup Backbone. On top of that, we have relentlessly continued to build our  understanding in several emerging technological themes, from cybersecurity, compliance tech, ESG economy infrastructure, to revisited some existing themes such as Blockchain and AI.

With nine months passed into the year, Beacon VC wishes to update our readers on the prominent innovation themes that has taken hold in 2024, and will shape the innovation community, corporate interest, and regulator conversion in 2025.

Underlying forces shaping innovation trend

Continued economic uncertainties and geo-political tensions forces business to rethink cost per growth

The global economic growth is evidently slowing down in 2024, as a result of higher interest rates and geopolitical uncertainties weighing on consumption and investment. The global trade arena has been increasingly difficult to navigate with the heating up of the geo-political scene, affecting anything from supply chain continuity to fluctuation of major currencies. The growth gap between advanced and developing economies is expected to widen. Both major economies such as the US, the Eurozone, and China, and emerging economies like ASEAN are all expected to face distinct challenges that will keep growth subdued from economic bubbles, internal political unrests, to plaquing societal problems. The global economic prospect for 2024 will likely see a slowdown in GDP growth, with expectations set at 2.7%. 

During this time of turbulence, businesses still face pressure from investors to grow, but not at all costs. Companies, conventional or startups alike, are finding ways to maximize marginal revenue at minimum marginal costs, and hence have turned to automation, infrastructure-as-a-service providers to reduce CAPEX, and ecosystem-wide partnership efforts to share fixed costs.

AI made its way to boardroom discussion of companies and regulators, but the execution is slow-coming

The rapid advancements in AI capabilities, such as natural language processing and computer vision, will further fuel its integration into various industries. The market size is expected to show an annual growth rate (CAGR 2024-2030) of 15.83%, resulting in a market volume of US$738.80bn by 2030. With a tremendous development in Generative AI, this segment is expected to expand at CAGR of 42% over the next 10 years driven by training infrastructure in the near-term and gradually shifting to inference devices for large language models (LLMs), digital ads, specialized software and services in the medium to long term.

The proliferation of AI use cases have caught the interest of both companies, who are finding ways to integrate the solution into current workflow to bolster efficiency or unlock human resource creative potentials, and regulators, who are worrying about misuse of AI or snowballed AI biases. On one hand, the industry is witnessing an increase in corporate POCs with enterprise AI solutions, but only those proceeding to real adoption demonstrate real monetary benefit, deriving from the pressure to uphold profitability and proposition that’s relevant to company’s unique macro and micro setting (for example, Thai companies may be more interested to reduce human error than reducing payroll cost savings). On the other hand, regulators, acknowledging the intricacy of the subject and technology’s nascent development, have issued guidelines and recommendations as opposed to stringent detailed rules. An example of AI recommendation for Thai executives developed by AIGC under ETDA can be found here.

ESG consideration entering mainstream mentality and ramping up growth for ESG startups

The use of data by businesses and investors to assess and manage their environmental, social, and governance (ESG) performance has become increasingly common over the last few years. This trend has continued in 2024, with a focus on data-driven ESG initiatives across a variety of industries. Several major regulators and governments passed climate bills and reporting requirements into law, setting up 2025 to be an important year for ESG and corporate sustainability. New technologies like blockchain and artificial intelligence are improving data transparency and enhancing ESG trends analysis, boosting the accuracy and efficiency of reporting, but also are being criticized for their consumption of energy from carbon-intensive sources and water.

The rush of ESG adoption and system overhaul in organizations alongside the realization of internal implementation capability spark upsurge in corporates looking to adopt startup solutions for this endeavor, ranging from waste management, smart water treatment, carbon footprint calculation, energy consumption optimization, to internal information mapping.

Enhanced data capability through IOT, 5G, and AI synergy

5G is the fifth generation of cellular networks with up to 100 times faster than 4G, 5G is creating never-before-seen opportunities for people and businesses. It is expected to grow 10-fold by 2030 with network expansion in several markets. Faster connectivity speeds, ultra-low latency and greater bandwidth is advancing societies, transforming industries and dramatically enhancing day-to-day experiences.

This enhanced connectivity also comes with a colossal amount of data being generated and, with the help of AI, these large data sets can be analyzed real time to inform people and businesses of the decision to be made based on specific circumstances. Nevertheless, there’s still on-going discussion on the governance framework and data management techniques to ensure that these data are truly in-compliant with data privacy principles

Innovation Trend to Watch in 2025

Marketing Reengineered and Customer Value Reimagined

• Emergence of new Value Propositions: As consumer sophistication increases and needs become evermore fragmented, the definition of value has transcended beyond ordinary price-tag into experiences, alignment with value, durability, or fit with personal liquidity. ESG value is amongst the latest value propositions that consumers are starting to show willingness to pay for. This new definition of value requires businesses to rethink strategy and key activities for customer acquisition and CRM.
• Hyper-Personalization: Increased real-time data points and availability of enterprise-grade AI unlock opportunities for micro-targeting, from segment based marketing efforts down to individual level, allowing for more personalized offerings and experiences, more seamless experience online to offline, and more effective value proposition design aligned with evolving customer needs.

Harvesting the Power of Data

• Decision-making and Analysis Made Simple: Data analytics including the use of AI can extract profound insights from data, guiding strategic decision-making, product development, and marketing campaigns. For example, there is a proliferation of AI-assisted software that help research labs discover new chemical or material formulations, that would both enhance the effectiveness of the research process, reduce cost to new product discovery, and speed up the time to market.
• Optimization and Automation Revolution: AI can automate data collection and processing, making it faster, more reliable, and cost-efficient. This frees up human resources for higher-level tasks and lets start-ups capitalize on data insights more effectively. Formerly labor-intensive tasks such as invoice matching or data entry are being replaced by AI helpers, and the role of humans transcend from executor to quality checker.
• Uncover New Business Opportunities: AI analysis can uncover trends and unmet needs, leading to groundbreaking solutions and business opportunities. Such opportunities include new revenue generation potentials based on consumer psychographic segmentation and behavior, cost reduction along the supply chain, or identifying weak points within the business operation.

Digitizing Legacy Pillar of Business – Trust & Compliance

• Rush for Cybersecurity Fortress: As anxieties rise and connectivity brings increased vulnerability, data privacy and security become non-negotiables. Startups are in the rush to offer solutions that would help clients preserve security and anonymity of information and transaction, while not compromising on user experience.
• Simplifying Compliance Activities: The tightening regulatory landscape around ESG and PDPA/GDPR necessitates active compliance to avoid legal consequences. Among the early challenges that corporates and startups need to overcome is an efficient process to map and manage data, consent, and relevant stakeholders. On top of that, there’s an increasing demand for solutions that would help manage reporting activities for internal control and external regulators.
• Responsible Use of Technology: As AI becomes more prevalent, concerns about bias and fairness will intensify. Companies that embrace responsible AI development, ethical decision-making frameworks, and transparent data-driven algorithms will build trust and mitigate potential societal risks. The effort to de-bias AI requires philosophical, technological, and data analytic capability that most companies, albeit large or small, have access to. The industry can expect to see the emergence of third party solutions to conduct bias/ algorithm audits, or debiasing tools for model training.

Cultivating Human-AI Synergy

• Augmenting Human Capabilities: AI will not replace humans, but rather augment their skills. Humans will focus on creative tasks, strategic decision-making, and ethical oversight, while AI handles data analysis, repetitive tasks, and optimization. The industry will witness more use cases of AI-copilots moving from POCs to real adoption. Early use cases of such transition may include front-end functions relating to sales outreach or customer handling, and back-end functions such as data cleaning and entry and resource planning.
• Creating Impacts through Collaboration: AI becomes a powerful tool for addressing social challenges, managing resources sustainably, and promoting environmental responsibility. However, as much as AI can add value to humankind, human expertise is critical to guide AI development and ensures ethical considerations are upheld. The industry can expect continued discussion on AI development guidelines, but the conversation will expand beyond the circle of technology industry leaders and regulators, to be joined by philosophers, human right activists, and academia.

Beacon VC Investment Activities in 2024

Since the past update, Beacon VC has gotten approval for seven new investments. These investments operate from various geographical regions, from Southeast Asia, Europe, and North America, and cover many verticals from HRM, enterprise blockchain, carbon footprint assessment, to enterprise efficiency tools.

Opportunistic Fund

• [Direct Investment] (Official) HumanSoft – Thai HR solution platform for SMEs and corporates: HumanSoft is a customizable cloud-based HR solution designed for SMEs and corporates, streamlining HR tasks to enable business owners to focus on their core operations. The platform supports a wide range of complex HR activities, including shift management, various clock-in/clock-out methods, payroll calculation, employee onboarding, and development.
• [Direct Investment] Singaporean Conversational AI solutions: Generative AI is becoming a critical part of businesses especially for customer support. This company helps enterprises efficiently engage customers with its human-like AI solutions with ranges of activities from loan collection, sales outreach, to complex customer service.
• [Direct Investment] Thai Customer Data Platform: This Thai-based startup provides a solution to better collect, store and manage customer data. It leverages technology to track unknown to known data supporting corporates to better store and utilize data in a structured manner.
• [Fund Investment] Southeast Asia-focused Blockchain Infrastructure Fund: The fund seeks to support the shift towards a decentralized digital economy where liquidity and user participation are seamlessly integrated.  It focuses on investments in regulated digital asset platforms or solutions, decentralized finance (DeFi), infrastructure, and consumer applications.

Impact Fund

• [Direct Investment] A British SaaS platform for calculating carbon emissions: The platform allows companies to see which processes are responsible for emissions, and identifies specific recommendations for companies to reduce emission by leveraging scientific research. The company aims to help multinational companies reduce scope 3 emission in their supply chain.
• [Direct Investment] An American SaaS platform for product life cycle assessment: The platform helps FMCG and retailers track the carbon footprint of the entire product lifecycle, starting from the upstream in sourcing and manufacturing process to downstream in disposal and recycling process. This gives insight on how to optimize the footprint and tools for brand owners to fully comply with growing regulator demands.
• [Direct Investment] An Indonesian comprehensive micro-SME business solution. The company aims to equip micro-SME businesses in Indonesia with all-in-one business solutions ranging from accounting, HRM, sales and inventory management, as well as financial management, with hopes that these businesses will thrive in the Indonesian market and become financially included in the formal financing sector.

Published researches in 2024

This year Beacon VC moved our pursuit of self-education from focusing wholly in ESG space to more emerging topics within the innovation community.  Thus far, Beacon VC published four articles with hopes to be a profound thought-starter for our readers: Unlocking the Power of Reals: How Blockchain is Revolutionizing the Future of Finance, Conversational Banking and Why It Matters, Potential ESG Impacts in Startups Created by Early-stage Minority Investors, and How Socioeconomic Status Affects Thai Education Inequity and How Stakeholders in the Community Can Address It. Stay tuned for more articles that would ride along the innovation theme we have described earlier.

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