Vietnamese startups still a venture capital magnet

By Thuy Tuong
Sat, July 15, 2023 | 8:25 am GMT+7

Vietnam’s tech startup scene has continued to attract venture capital (VC) investments, pushing the country further towards its aim of becoming a fully digital society by 2030.

South Korea-based Shinhan Venture Investment is planning to increase its Southeast Asia focus with the $200-million flagship global fund that it completed raising a few months ago, Nikkei Asia reported Wednesday.

Of the flagship fund, around 50% will be allotted to Southeast Asia, 30% to the U.S. and other countries and 20% to South Korea, JinSoo Lee, head of global investment at the fund told the Japanese newspaper.

"We are focusing on Southeast Asia, especially Indonesia, Singapore and Vietnam. We are sector- and stage-agnostic, and our investments span from seed to pre-IPO. Our strength is that we can leverage our subsidiaries, such as banks, insurance and credit cards in Vietnam, Indonesia and Japan to support our founders and help them expand to other regions,” he said.

The Shinhan global flagship fund has already closed a few deals in Southeast Asia, including one for Singapore-based Speedoc, Indonesia's aquaculture startup eFishery and insurtech specialist Pasarpolis, Nikkei Asia reported.

The fund’s limited partners include Shinhan Bank, Shinhan Card, Shinhan Investment Bank, and Shinhan Life.

A South Korea office of Shinhan Financial Group, the parent corporation of Shinhan Venture Investment. Photo courtesy of the group.

A South Korea office of Shinhan Financial Group, the parent corporation of Shinhan Venture Investment. Photo courtesy of the group.

In February, VinaCapital Group’s technology investment arm VinaCapital Ventures announced it was investing $1 million in Koina, a Vietnam-based data-driven farm-to-business agriculture technology platform.

Hoang Duc Trung, partner at VinaCapital Ventures, explained: “Koina’s mission is to be an innovative hub in Vietnam’s agriculture sector. With the Vietnamese government promoting green, environmentally friendly agriculture, we hope to play a part in improving the supply chain and Vietnamese farmers’ lives.”

As per the national strategy on digital transformation announced in 2020, the digital economy’s share of gross domestic product will increase to 20% by 2025.

Vietnam hopes that focusing on digital economy growth will help it realize its vision of becoming a high-income economy by 2045.

This is backed by the World Bank, which says: “If digital sectors expand by about 10% every year, the cumulated monetary gains for the Vietnamese economy will exceed $200 billion over 2021-2045, or about the size of the country’s current GDP.”

In 2021, new startup support centers were announced in Hanoi, Danang and Ho Chi Minh City. A year later, a roadmap for boosting innovation in science was revealed, with promises to spend 1% of GDP on scientific research. Another announcement said business innovation surveys would be introduced to monitor the development of startups.

A recent report by venture fund Do Ventures and the National Innovation Center, a unit under the Ministry of Planning and Investment, says Vietnam’s startups attracted a lot of investor interest in 2022. Do Ventures is an early-stage venture capital firm that focuses on making investments in information technology companies in Vietnam and Southeast Asia.

The report ranked Vietnam third in the region in terms of deal count and fourth in deal value last year.

Notably, domestic funds were top investors in local startups last year, accounting for 45% of the total deal value. Ranked by aggregate value, Vietnam fell to fourth position with 8% of the regional total, following Indonesia’s 44%, Singapore with 27%, and the Philippines with 9%. It is worth noting that Singapore and Indonesia had much later-stage investments and little seed/pre-seed, while Vietnam’s seed levels were strong.

Fintech, retail, healthcare, and payments were the most in-demand sectors for funding.

However, total investment in Vietnamese startups was just $634 million in 2022, down 56% from the record high of $1.4 billion in 2021, the report noted.

Deals completed in early 2022 included Sky Mavis with $150 million, OnPoint with $50 million, and Timo with $20 million.

In a recent KPMG-HSBC joint study on Asia-Pacific’s technology-focused startup scenes, Vietnam was ranked one of Asia’s newest and most dynamic.

The number of startups, around 1,600 at the beginning of the pandemic, nearly doubled to 3,000 by the end, including four unicorns: electronic payment solutions provider VNPay; gaming startup-turned-conglomerate VNG; smartphone e-wallet Momo; and blockchain player Sky Mavis, the maker of NFT-based game Axie Infinity.

Other heavyweight names include M Village, which offers co-living housing for young professionals, and TopCV, which focuses on resume creation tools for job-seekers.

Major domestic VC funds

According to Preqin, a privately held London-based investment data company that provides financial data and insight on the alternative assets market as well as tools to support investment in alternatives, the three largest Vietnam-focused VC funds that closed their raising rounds between 2021 and 2022 are the following:

AVV Alpha ($64 million)

HCMC-based Ascend Vietnam Ventures (AVV) closed its flagship, early-stage VC fund AVV Alpha at $64 million in June 2022, exceeding its original target of $50 million.

The fund, dedicated to Vietnam, will seed up to $2 million into 25 start-ups, in verticals like blockchain, edtech, fintech, gaming, SaaS (software as a service), wealth management, and wellness. AVV is supported by IFC, the private-sector arm of the World Bank Group.

ThinkZone Fund II ($60 million)

Team members of ThinkZone, a Vietnam-focused VC fund. Photo courtesy of ThinkZone.

Team members of ThinkZone, a Vietnam-focused VC fund. Photo courtesy of ThinkZone.

Accelerator and VC firm ThinkZone Ventures raised $60 million in February 2022 solely from Vietnamese limited partners; a task rendered very difficult during the pandemic, when overseas outreach became challenging due to travel restrictions.

The fund is set to invest in pre-seed to Series A rounds in fintech, edtech, and e-commerce in Vietnam. Its limited partners include local conglomerates such as IPA Investments, Corporation, Phu Thai Holdings and Stavian Group.

Do Ventures Fund I ($50 million)

Do Ventures raised $50 million in its first fund from South Korean internet leader Naver, Sea (the parent company of Garena and Shopee), and Singapore-based Vertex Holdings.

The fund’s investment targets include business-to-customer and business-to-business platforms, early-stage Vietnamese startups, and it helps traditional businesses digitize faster.

Comments (0)
  • Read More
Work begins on Mitsubishi Estate’s $55 mln logistics facility in northern Vietnam

Work begins on Mitsubishi Estate’s $55 mln logistics facility in northern Vietnam

Logistics facility brand Logicross, under Japan’s Mitsubishi Estate, kicked off the construction of its Logicross Hai Phong ready-built warehouse in Vietnam’s northern city of Hai Phong on Tuesday.

Industrial real estate - Wed, November 20, 2024 | 10:58 am GMT+7

French logistics giant eyes to launch electric barges on inland waterways in Vietnam

French logistics giant eyes to launch electric barges on inland waterways in Vietnam

CMA-CGM Group, a French shipping and logistics company, has plans to deploy electric barges, initially on inland waterways in Vietnam.

Companies - Wed, November 20, 2024 | 10:43 am GMT+7

2025 a turning point for Vietnam stock market: broker

2025 a turning point for Vietnam stock market: broker

Vietnam's stock market has struggled to capture the attention of both domestic and foreign investors in recent months, reflected by persistent foreign capital outflows and a steady decline in market liquidity, but next year will be a turning point for the market, says Chen Chia Ken, CEO of Phu Hung Securities JSC.

Finance - Wed, November 20, 2024 | 7:07 am GMT+7

Construction trio keen on building $1.5 bln expanded expressway in southern Vietnam

Construction trio keen on building $1.5 bln expanded expressway in southern Vietnam

Three construction majors in Vietnam are interested in building an expanded expressway connecting Ho Chi Minh City with the Mekong Delta provinces of Long An and Tien Giang for an estimated VND38.6 trillion ($1.52 billion).

Infrastructure - Tue, November 19, 2024 | 8:18 pm GMT+7

Singapore, Germany upgrade relations to strategic partnership

Singapore, Germany upgrade relations to strategic partnership

Singapore and Germany have decided to elevate their ties to a Strategic Partnership to promote closer cooperation in areas of mutual interest such as security, artificial intelligence (AI) and clean energy.

Southeast Asia - Tue, November 19, 2024 | 8:01 pm GMT+7

Thailand’s rice shipment up 20% in 10 months

Thailand’s rice shipment up 20% in 10 months

Thailand exported 8.37 million tons of rice in January-October, a year-on-year increase of 20%, according to the Ministry of Commerce.

Southeast Asia - Tue, November 19, 2024 | 8:00 pm GMT+7

Vietnam’s inconsistent legal framework poses problems for FDI sector: Deep C exec

Vietnam’s inconsistent legal framework poses problems for FDI sector: Deep C exec

Vietnam’s legal framework lacks consistency and the foreign direct investment (FDI) sector will soon face challenges related to the Law on Environmental Protection, says Bruno Jaspaert, CEO of Deep C Industrial Zones.

Economy - Tue, November 19, 2024 | 6:30 pm GMT+7

Vietnam shares sink on extended foreign selloffs

Vietnam shares sink on extended foreign selloffs

Vietnamese equities fell for a fourth consecutive day on Tuesday as foreign traders extended their selling spree.

Finance - Tue, November 19, 2024 | 5:10 pm GMT+7

Germany’s household product firm QuickPack to invest $32 mln in Vietnam

Germany’s household product firm QuickPack to invest $32 mln in Vietnam

Germany’s QuickPack, a specialist for household goods and hygiene products, will invest €30 million ($31.8 million) in Vietnam’s Mekong Delta province of Long An.

Industries - Tue, November 19, 2024 | 4:24 pm GMT+7

Malaysian millionaire willing to invest in convicted Vietnamese tycoon’s property project: lawyers

Malaysian millionaire willing to invest in convicted Vietnamese tycoon’s property project: lawyers

Malaysian millionaire Vincent Tan has evinced investment interest in a residential project owned by convicted tycoon Truong My Lan, chairwoman of Van Thinh Phat Group, lawyers for the latter have disclosed.

Real Estate - Tue, November 19, 2024 | 4:17 pm GMT+7

‘Bottleneck of bottlenecks’ continues to dog Vietnam's property, infrastructure projects

‘Bottleneck of bottlenecks’ continues to dog Vietnam's property, infrastructure projects

Limited consultations between state agencies and the parliament’s primary focus on wording are issues with Vietnam’s legal framework adversely affecting property and infrastructure projects, say experts and corporate leaders.

Economy - Tue, November 19, 2024 | 3:40 pm GMT+7

President Xi Jinping hastens construction of 3 Vietnam-China rail routes

President Xi Jinping hastens construction of 3 Vietnam-China rail routes

Chinese President Xi Jinping has called for more substantial cooperation between China and Vietnam, including the pacier implementation of three railway routes linking the two nations.

Infrastructure - Tue, November 19, 2024 | 3:08 pm GMT+7

Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnamese housing developers are offering several incentives including deferred principal payments and interest support to stimulate demand and boost liquidity as the year nears its end.

Real Estate - Tue, November 19, 2024 | 2:29 pm GMT+7

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia-based EQ Resources Limited has acquired its fellow firm Tungsten Metals Group (TMG), which owns and operates the largest ferrotungsten (FeW) factory outside China.

Companies - Tue, November 19, 2024 | 11:00 am GMT+7

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities JSC (TCBS) has become the largest securities company in Vietnam by charter capital after finishing a rights offering last week.

Finance - Tue, November 19, 2024 | 9:11 am GMT+7

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam's airports operator ACV expects to earn $145 million from non-aviation services this year, accounting for around 18.83% of its total revenue, which is modest compared to other countries, said deputy general director Nguyen Duc Hung.

Companies - Tue, November 19, 2024 | 7:45 am GMT+7