22:34 10/8/24 Startup VIỆT
VIETNAMESE STARTUPS ‘CAN NOT JUST START UP ON TV’ Ho Nguyen Thao 10:00 May 1, 2024 Saigon Economics Online
(KTSG) – Funding for Vietnamese companies fell to 541 million dollars last
year, a dramatic contrast to the high of almost 1.9 billion dollars in 2021.
Vietnamese startups are under pressure from global rivals operating in their
own country, as well as rivalry from ASEAN colleagues. 
From an exhibition, dreaming about strong Vietnamese startups 
Can Vietnamese startups withstand the winter to raise capital?
Founder Nguyen Ba Canh Son at the electric motorcycle factory. Photo: DatBike
It is not easy to access startup programs in the provinces so Vietnamese startups
tend to explore overseas finance sources. Vietnamese entrepreneurs are
becoming increasingly interested in international development support programs. about:blank 1/6 22:34 10/8/24 Startup VIỆT
Southern Vietnam is still promising...
Silicon Valley Bank (SVB) – a US bank for startups in Silicon Valley –
abruptly failed in March 2023. At that time, attention was drawn to Vinnie
Lauria - one of the co-founders of Golden Gate Ventures – on a motorbike
carrying his two children in the bustling streets of Ho Chi Minh City.
The American entrepreneur had moved to the city after a long time working in
San Francisco and Singapore. At that time, Lauria believed that Vietnam would
be the epicenter of Southeast Asia, driving global growth in the next decade.
However, Lauria also cautioned that global investors are bewildered and their
actions seem irrational, akin to those of children. This suggests that attracting
capital would be more challenging in such an environment.
Amid the global downturn in fundraising, Vietnam is fiercely competing with
other Southeast Asian nations for venture capital and equity investments. As
reported by Tech in Asia, capital raising for Vietnamese startups has
significantly decreased, dropping from over $1.9 billion in 2021 to $940 million
in 2022 and just $541 million last year, consistently trailing behind Singapore
and Indonesia. Despite this decline, it reflects the interest of investors and the
potential they see in the Vietnamese market.
In the Southeast Asian startup triangle, Vietnam is seen as the third link, with
Singapore and Indonesia as the other two peaks. However, according to Startup
Blink, Vietnam ranked fifth in the region's startup marketplaces in 2023. Ho Chi
Minh City was placed in the top 100 emerging startup ecosystems by Startup Genome as well.
Ho Chi Minh City combines a number of elements to become Asia's Silicon
Valley. Its economy is vibrant, it is still in the "golden population" phase, a
wave of young people returning home to start businesses after studying abroad,
and a strong entrepreneurial culture has been fostered over many generations.
Not to mention many young foreigners have decided to establish businesses in
Thao Dien by making it their second home. "The Tech community there is
smaller compared to other places, but vibrant enough," said Christine Van, a
Vietnamese-American girl who has overseen public relations for numerous firms in Thao Dien.
Vietnam and Ho Chi Minh City have a thriving fundraising market, with up to
208 venture capital and equity funds operating. Domestic investors play a more
beneficial role than in the past. According to Le Hoang Uyen Vy, co-founder of about:blank 2/6 22:34 10/8/24 Startup VIỆT
the Do Venture investment fund, a decade ago, innovators may typically take up
to six months to investigate and decide to invest in a firm. But things have
changed. If we don't make a decision within a month or two, other financiers
will step in to complete the transaction," said a Do Ventures spokeswoman. Change are inevitable
It seems that by default, Vietnamese startups are "steel-plated" and "long-lived"
through many changes. Up to 5,000 companies close their doors each month,
yet the number of startups listed on official websites appears to be set at 3,800;
these figures may reflect the financing peak of 2021.
However, it's not widely known that Vietnam currently boasts only three
unicorns: the blockchain company Sky Mavis and two e-wallets, MoMo and
VNLife. Startups are shifting across regions as they decide on their business
models, working environments, and markets. Naturally, this landscape includes
both rising and falling stars among the numerous young and talented ventures.
Forbes Vietnam anticipates that Coolmate, Dat Bike, and KiotViet will be
standout startups in 2024. In addition, Tech in Asia has spotlighted 50
noteworthy Vietnamese startups, including well-known companies like F88
Lending Company, which raised $188 million, and the Be ride-hailing app,
which secured over $90 million. Other startups have raised a few million
dollars, with many securing around $100,000. Several have kept their
fundraising amounts undisclosed.
This scenario offers an accurate yet incomplete picture of Vietnam's startup
ecosystem. While there are substantial successes, some giants are downsizing,
and some startups are disappearing or relocating to different environments.
Stefanie Yeo of Tech in Asia predicts that the fintech, electric vehicle, and
web3 sectors will be the most prominent in Vietnam's startup scene in the near future.
"Actions speak louder than words" for startup
According to Nguyen Duc Long of the National Innovation Center (NIC),
Vietnam is very open in dialogue between the government, policymakers,
investment funds, and the startup community to identify market weaknesses. about:blank 3/6 22:34 10/8/24 Startup VIỆT
But regulations are one thing, whether they comply with them or not is another
matter. This includes issues like local licensing, long-term visas for foreign
founders or tech talents, stock option regulations, or convertible loans...
Hardly any startup chooses to pursue an IPO in Vietnam. CEO Hong-Jin Kim of
Stic Investments, based in Seoul, said at a tech investment conference in Ho Chi
Minh City: "This limits the ability to exit or sell shares of investors or makes it
difficult to transfer money abroad. Due to such regulations and the scale of
startups, it is quite challenging to IPO in Vietnam.”
Support for startups varies widely in startup nations like Singapore, Israel, or
Canada. It may involve getting money, growing the company's reach, opening
up new markets, or even giving IT people visas.
Although Ho Chi Minh City has not yet achieved the same level of support as
global startup centers, it is still considered a promised land for startups,
including foreign individuals and companies. Young domestic firms are under a
lot of pressure from foreign entrepreneurs, particularly from Korean businesses.
Because Ho Chi Minh City is the second choice for Korean startups in
Southeast Asia, after Singapore
The Korean government has 15 support programs for SMEs to develop
domestically and seek markets abroad. In the Diamond Plaza building, run by
Korea's Lotte Group, a large area is dedicated to two government organizations
supporting businesses. These are KOTRA, a state-sponsored trade and
investment promotion organization, and KOSME, the government agency supporting SMEs and startups.
Ms. Pham Thi Huong Thao, General Director of F1Security – a cyber security
company from South Korea – shared to Saigon Economics that Korean startups
can receive free office support at Diamond Plaza and information about
business opportunities in Ho Chi Minh City and other provinces in Vietnam.
"When they feel they are strong enough, Korean companies can move out of
KOSME, but they will not be expelled or completely cut off from support when
they leave," she said. She also said that the majority of startups here focus on
information technology and areas that Vietnam has yet to develop.
In October 2023, the National Innovation Center (NIC) inaugurated a modern
facility worth VND 1 trillion at Hoa Lac Hi-Tech Park in Hanoi. On April 3, the
Ho Chi Minh City Department of Science and Technology said it would launch
the Ho Chi Minh City Innovation Startup Center, deploy the Innovation
Platform (HOIP), and organize startup competitions..... about:blank 4/6 22:34 10/8/24 Startup VIỆT
However, practical support policies, such as giving free office for startups or
deep discount, capital support or market information... are still a dream of Vietnamese startups.
During the meeting between startups and Party Secretary Nguyen Van Nen and
Chairman of Ho Chi Minh City People's Committee Phan Van Mai on March
28, the participants used quite "shocking" words to express their aspirations
with shocking words. As Vu Kim Hanh, founder of the Green Startup program
in agriculture and processing, criticized “No Action Talk Only - we need to start
taking action not only talking.” CEO Phan Nhat Minh from venture capital fund
Gobi Partners came up with the phrase "Talk less, do real". And Vinh Le, owner
of Zumwhere restaurant chain, believed that startups should "Think big" for startups.
Startups on TV - Catch stars in the sky!
The saying "get on TV to buy" for cheap goods or "get on TV to borrow
money" for easy loans with low interest rates are as popular myths nowadays,
symbolizing reaching for the stars.
When saying about startup, it is necessary to concern about money, but foreign
capital now seems to be more accessible than the startup and enterprise support
programs that every province and city has. Even the venture capital of the
"sharks" on the reality TV show Shark Tank Vietnam was scripted to add drama to the show.
Dat Bike is an example. When pitching on Shark Tank Vietnam in 2019,
founder Nguyen Ba Canh Son was mercilessly criticized by the sharks. Some
people said it was "dangerous", and others said that his startup was creating
unnecessary products, doubting consumer demand. Subsequently, at the close of
2022, the Da Nang-based electric motorcycle firm managed to secure $8 million
in foreign funding, bringing its total cash raised to $16.5 million. According to
estimates by Venture Cap Insights, DAT Bike's valuation was valued at 32 million dollars at the time.
Last year, Da Nang's startup was funded by the British Government in a green
start-up project, which was financed by HSBC Bank with the intention of
bringing Vietnamese electric scooters abroad. Domestically, Dat Bike's vehicles
were also adopted by Gojek and Baemin (which has since withdrawn from Vietnam). about:blank 5/6 22:34 10/8/24 Startup VIỆT
Many Vietnamese startups have appeared on Shark Tank Vietnam without
raising funds or receiving less than promised. Therefore, many startups
appearing on the show do not view it as an opportunity to raise capital but rather
to reach the public. Startups must become famous on TV and reach for the stars
to receive funding from the audience or hope to attract foreign capital. about:blank 6/6