PHNOM PENH -- As he described his search for funding for Khmerload, a digital media company touted as Cambodia's version of BuzzFeed, chief executive Vichet In recounted an arduous struggle. "We sent an email to 10 [venture capitalists] -- no reply. We talked to a few investors -- there was no interest. They couldn't believe we could do an expansion to another country."
Finally, U.S.-based investor 500 Startups, which describes itself as "a global venture capital seed fund," came up with $200,000, cash that could help the company expand beyond Cambodia and Myanmar, where Myanmarload was launched in 2016. The websites churn out the kind of entertainment and celebrity gossip that was the foundation for the global success of U.S.-based BuzzFeed, a website that mixes entertainment, news and so-called viral content.
The 500 Startups deal, announced in March, was the first time a Silicon Valley venture capital fund had put its money into a Cambodian "startup," a term for a newly-established business that nowadays usually refers to a tech, online or smartphone-related enterprise.
500 Startups did not reply to a request for comment on the Khmerload investment and on whether there were other such opportunities in Cambodia, but that landmark deal could soon be followed by others.
Potential for high returns
"Foreign investors are especially keen on Cambodia's tech sector because a small investment in an emerging market can lead to a high return on investment," said Maya Gilliss-Chapman, chief executive of Cambodians in Tech, a global network of Cambodian technology professionals.
However, it can also be tricky to nudge distant capitalists to put their money into a small and little-known market such as Cambodia. "Risk and lack of knowledge of the region" are hurdles, said Steve Landman, a member of Mekong Angel Investor Network.
The longer game is also likely on investors' minds when looking at nascent digital markets such as Cambodia, according to Gilliss-Chapman. "When you invest in a company, you are looking for that company to exit [preferably via an initial public offering] and Cambodia has yet to see tech startups even near this stage," she said.
But with its high proportion of young people -- of Cambodia's 16 million population, half are under 30 -- and rising internet use, mostly via smartphone, the country is emerging as a small but potentially lucrative location for purveyors of digital media and e-commerce.
Cambodians are increasingly going online, with internet users growing by 43% over the course of 2016, according to social media marketing agency We Are Social.
Online job portals and applications for ride-hailing, food delivery and travel bookings all are possible growth areas that may be of interest to investors, Gilliss-Chapman believes.
One area of likely growth is e-commerce via mobile phones. In a country where only an estimated 30,000 people use credit cards there is room for growth for businesses providing shopping solutions that can bypass credit card requirements.
Mobimedia, an Australian company, is working with telecoms providers in Cambodia to allow mobile phone users to make purchases by allowing deductions to be taken from their phone balance.
For now that will be limited mostly to what finance professionals call micropayments, as "people don't have much credit on their mobiles," said Keeyan Admana, a business development manager at Mobimedia.
But Admana said that with Cambodia's economy projected to grow at 6-7% a year for the next two years and as average incomes rise, e-commerce should increase. Getting online is relatively inexpensive, with 5 gigabyte data packages available for $5. "The internet here is surprisingly cheap now," said Vichet In, brushing off suggestions that a low average gross domestic product per head of around $1,200 a year will undermine potential tech profitability.
This accessibility, as well as the availability of low-priced Chinese smartphones, is driving internet use. According to a U.S. government-funded report published in September 2016 by Open Institute, a Cambodian non-profit organization, over 96% of Cambodians claimed to own their own phone, with 48% saying they had accessed the internet or social network Facebook.
Politics and social media
Cambodia's two best known politicians have huge support on Facebook. In office since 1985, Prime Minister Hun Sen has over 8 million followers, while exiled former opposition leader Sam Rainsy has just over half that amount. Both men use the platform to promote policies and grab the electorate's attention -- as do the two main parties, the Cambodian People's Party and the opposition Cambodian National Rescue Party.
For leaders and parties, clickbait campaigning makes political sense. By 2016, the "most important source of news about Cambodia was Facebook/Internet (30%), followed by TV (29%), word of mouth (23%) and radio (15%)," according to Open Institute, which noted that Facebook's share doubled from 15% in 2013.
According to Future Forum, a Cambodian research organization, "the CPP has increasingly been focusing efforts to attract the support of the youth," adding that "Hun Sen himself has recently turned to Facebook, which he increasingly uses to present a friendlier, 'normal guy' image to the public."
But Cambodia's digital environment has become increasingly acrimonious as internet uptake increases. "The growth of social media and smartphones uses also make political communications more interactive and intense and less conventional," said Kimly Ngoun, lecturer in the Department of International Studies at the Royal University of Phnom Penh.
Sam Rainsy's exile is in part down to his alleging that Hun Sen had bought some of his 8 million followers from so-called "click farms" based abroad, earning the opposition leader a defamation suit and prompting his flight from Cambodia to Paris.
The type of sniping and abuse seen on Facebook and microblogging platform Twitter in Western democracies is taking hold in Cambodia. Neang Sovathana, a radio talk show host known as DJ Nana, has felt the sharp end of some online vitriol in response to her often-lively discussions about sex and relationships.
She laughs off the criticism but adds, as she discusses how social media and politics interact:"To see how Facebook is being used to attack each other, it is very strange."
The growth of internet access has not only enabled politicians to communicate directly with people, it has also given ordinary Cambodians a closer look at their leaders and enabled wider debate about the country's affairs.
"Despite the negative side of social media, fake news and that, people can still discuss things," said Youk Chhang, head of the Documentation Center of Cambodia, an archive of source material on the totalitarian Khmer Rouge era in the 1970s.
It is that growing interaction and connectivity that Vichet In and other tech entrepreneurs in Cambodia are banking on to keep people online and drive business in the future. After all it is just a couple of taps on a touchscreen to go from leaving a comment on Hun Sen's Facebook page to checking out some celebrity gossip on Khmerload.
Despite the viral side of Cambodian politics and what appears to be growing political awareness among the population -- as seen from the 89% turnout in the June 4 local elections -- Vichet In said the website was steering clear of that kind of subject matter for now: "We are not doing politics, BuzzFeed is."
Even so, the lines between the two sites do blur, he noted, explaining: "We are similar in terms of focusing on socially viral content." At least for now, though, Khmerload prefers to stick to the lighter side of digital news.