Vietnam's private giant Vingroup launches VinVentures capital fund

Vingroup has launched a capital fund named VinVentures which is dedicated to investing in high-impact technology startups, with assets under management worth $150 million.

The initiative is expected to contribute significantly to the creation of digital technology enterprises in Vietnam and across the region, the corporation said in a Monday release.

VinVentures is a capital fund sponsored by Vingroup's chairman Pham Nhat Vuong and Vingroup, one of the largest private corporations in Vietnam.

The fund currently manages total assets of $150 million, of which $100 million is an inherited investment portfolio from Vingroup, with an additional $50 million expected to be disbursed over the next three to five years.

The primary investment focus of VinVentures includes artificial intelligence (AI), semiconductors, and cloud computing, as well as other high-tech products.

The fund also welcomes startups from diverse sectors, provided they demonstrate growth potential and the ability to deliver quality products and services, without being limited to those associated with Vingroup.

The fund initially targets Vietnamese market, focusing on startups with local founding teams in the early stages, specifically the seed and Series A rounds - which are the second and third of five typical funding rounds for startups.

In the future, the fund aims to broaden its scope to include startups in regional markets with development traits similar to Vietnam, such as Singapore, Indonesia, and the Philippines.

In terms of the investment process, the fund collaborates with potential investees through a series of defined steps: initial meetings, exchange of information, detailed research on the product and its target market, thorough investment appraisal, signing of negotiation agreements, and then the final investment contract.

The timeline from when a startup submits its application to when it secures funding typically spans two to three months, maxing up to six months for larger-scale transactions.

VinVentures sets forth specific investment criteria, targeting startups that demonstrate potential for sustainable growth, robust growth rates, and commercially viable products and services with substantial practical applications. Additionally, these startups must be led by founding teams with established credibility and extensive experience.

Investment transactions are executed on a foundation of professional investment principles, wherein VinVentures acquires equity stakes, becoming a shareholder in the company with clearly defined profit expectations.

Le Han Tue Lam, managing director of VinVentures, stated: "Beyond providing capital, VinVentures offers startups a unique advantage by facilitating connections within the Vingroup ecosystem."

This includes using the ecosystem as a rigorous platform for evaluating and testing products and services before they enter the market, with the potential for these companies to also become customers of the startups.

"Moreover, by leveraging our extensive network and resources as the leading corporation in Vietnam and the region, we are equipped to provide advice and assistance. This support helps startups to establish relationships with major market partners and acts as a catalyst for their future growth," Lam added.

Investing in technology startups has consistently been a strategic priority for Vingroup as it transitions into Vietnam's leading technology conglomerate. Prior to VinVentures, Vingroup had already invested in numerous tech startups through funds such as Vingroup Ventures and VinTech City.

With robust resources from the conglomerate, these startups have successfully developed and launched products to the market, with some even rising to become leaders in their respective fields, including VinBigData, VinAI, VinBrain and VinCSS.

By continuing Vingroup's commitment to nurturing and expanding digital technology enterprises, VinVentures will strategically optimize opportunities for the realization and introduction of innovative technology ideas into the Vietnamese and regional markets, at the same time broadening the conglomerate's revenue streams, the release said.

According to the Global Startup Ecosystem Report (GESER 2023) by Startup Genome, Vietnam's startup ecosystem is currently ranked third in Southeast Asia, boasting an estimated economic impact of $5.22 billion.

The number of startups in Vietnam has dramatically increased from approximately 1,600 during the Covid-19 pandemic to over 3,800 at present, with AI startups making up nearly 10% of the total.