'Winter' for Vietnamese startups: Are investors short on funds, or startups weak?

Vietnamese startups are failing to attract investors with the latter remaining cautious amid economic difficulties, said experts.

Bui Quang Minh, board chairman at Beta Group, said the "winter" Vietnamese startups are experiencing derives from an "investor crisis".

"Many years ago, the disbursement of money was easy, and large investors were happy to pour money into new projects. Now there has been a necessary adjustment; the right amount of money must be spent, so slowly investors will return to a calmer market," he noted.

Minh was speaking at the launch of Shark Tank Vietnam season 6 in Ho Chi Minh City last week. Shark Tank Vietnam is a TV show that helps startups source investment from prospective investors.

After the 2021 boom when investment capital in Vietnamese startups reached nearly $1.54 billion, the figure decreased sharply in 2022 to $634 million, down 56% year-on-year, according to the 2023 technology innovation and investment report by The National Innovation Center and Do Ventures Venture Capital Fund.

In the first six months of this year, the tally reached $413 million, DealStreetAsia's Data Vantage data shows.

At a conference at the launch, a question was raised: Are investors running out of money, or are startups weak and unable to raise capital?

Pham Thanh Hung, vice board chairman at CEN Group, said real estate revenue has recently decreased due to cash flow issues, thus investors are cautious when it comes to pouring money into startups.

Le Han Tue Lam, director of Nextrans Vietnam Investment Fund, said that at every stage, there are channels to attract more cash flow. "Money is not lacking, it's just being transferred from one field to another."

For example, more than 150,000 new securities accounts were opened in August, according to the Vietnam Securities Depository and Clearing Corporation (VSDC), showing that the securities channel is still gaining attention from investors.

Analysts also believe that falling interest rates will trigger more cash flow and investment in the stock market.

Regarding investment appetite, Hung of CEN Group plans to invest in startups that have proven products and business models.

Nguyen Hoa Binh, chairman of NexTech Group, said he will invest based on strict management, good operations, replicability, and profit above all.

Minh of Beta Group is on Shark Tank for the first time, prioritizing business models in the fields of entertainment, housing, and education.

Lam from Nextrans said his company has an appetite for sustainable investment in edtech, agritech, and green technology startups.

According to the producers, after five seasons, 143 out of the 243 startups that have appeared on Shark Tank had received handshakes with the "sharks", and 30 startups have passed the appraisal round and received real investment.

Shark Tank Vietnam's new season will premiere on September 25 with seven sharks in the hot seats. The judges for season 6 includes five old sharks and two newcomers.

- Pham Thanh Hung, vice chairman of CEN Group

- Nguyen Hoa Binh, chairman of NexTech Group

- Le Hung Anh, general director of BIN Corporation Group

- Louis Nguyen, general director of Saigon Asset Management Company (Saigon Assets Management SAM)

- Erik Jonsson, Swedish businessman

- Le Han Tue Lam, director of Nextrans Vietnam Investment Fund

- Bui Quang Minh, chairman of Beta Group