US-based fund-of-funds Capria Ventures is looking to close its first commitment in Vietnam this year as the Southeast Asian nation continues to build a venture capital track record.
“We are looking to back at least one fund that is either based in, or investing primarily in, Vietnam. We can see us expanding to more funds in the coming years as Vietnam shows attributes of the next big market,” the firm’s managing partner Dave Richards told DealStreetAsia in an interview.
“If you look back, about four years ago, there was only one early-stage venture firm in Vietnam. Now, there are a number of funds being set up, and you’re also seeing private equity groups recognising that technology is where the leverage and scale are going to come from,” he said.
VC funds in Vietnam
| Fund | Launch | Fund size | Portfolio |
|---|---|---|---|
| VSV Capital (an accelerator) | 2014 | $7M | Loship, LOOP Smart POS, Base.vn, Vibeji, others |
| 500 Startups Vietnam | 2015 | $14M | Base.vn, Bizzi, CricketOne, Hiip, Intrepid, others |
| VIC Partners | 2016 | N/A | Callio, TopCV, Designbold, VLeisure, Cohost.ai, others |
| ESP Capital | 2017 | $20M | MindX, Cooky, Luxstay, Canavi, Ecomobi, Homedy |
| VinaCapital Ventures | 2018 | $100M | Homebase, Rever, Wee Digital, Gostream, UrBox, Logivan, Ecomobi, others |
| VietCapital Ventures | 2018 | N/A | Ecotruck, Everest Education, Gene Solutions |
| Velocity Ventures Vietnam | 2018 | N/A | Kamero, UpGen |
| ThinkZone Ventures | 2019 | $30M | EMDDI, FoodHub, HourseCare, Graphene Life, iSalon, Airiot, others |
| FEBE Ventures | 2019 | $25M | Zenyum, Propzy, Nano, Janio, Vara, Locad, Clevai, Alami |
| Next100 | 2019 | $10M | Alepay, Tienngay.vn, Botbanhang, Pushsale, cnvloyalty, Boxme, HeyU, TopCV, Schola |
| Viet Valley Ventures | 2019 | N/A | JobsGo, WindSoft, Ecom Easy |
| Do Ventures | 2020 | $50M | Palexy, F99 |
| Touchstone Partners | 2021 | N/A | N/A |
Unlike Indonesia, which is Southeast Asia’s largest consumer market, Vietnam is more culturally integrated, which makes it easier to treat the country’s 95 million people as a single market, opined Richards.
Other factors that will help drive the Vietnam tech ecosystem include an anticipated faster economic recovery post COVID-19, favourable policies for the tech sector, and good tech talent.
“We’ve seen these cycles and some of the factors that have led to more development of the startup ecosystem in other markets like Brazil, Indonesia, India, and Mexico,” Richards added.
In terms of the addressable market, Vietnam also provides expansion opportunities as Indonesian startups expand into Vietnam and Vietnamese startups expand regionally, according to the fund’s managing partner.
Eye on Asia
Outside of Vietnam, Capria Ventures’ $100 million Capria Emerging Manager Fund continues to look at opportunities in Asia’s emerging markets such as Bangladesh, Nepal, and Cambodia. Richards said the firm’s investment into Myanmar “is going to be on pause” due to the recent coup and subsequent protests in the country.
Richards observes that European development finance institutions, in addition to the International Finance Corporation, are increasingly evincing interest in venture capital in these markets. However, competition among limited partners (LPs) in searching for assets is not too harsh yet.
“It’s still a buyer’s market. There are few venture funds that are oversubscribed in the region that I know of, meaning that the limited partners (LPs) have the upper hand choosing which funds they back,” he said.
Richards said he would look at funds with an investment theme in sectors such as fintech, edtech, agriculture, health tech, logistics, government tech, and job-tech.
Capria Ventures is deploying capital through its current Capria Emerging Manager Fund, having sealed partnerships with 20 fund managers.
Capria Emerging Manager Fund was launched in 2016 and secured a $40 million first close in 2018. LPs in the fund include Vulcan Capital, the International Finance Corporation (IFC), Omidyar Network, OIP Investment Trust and other US-based family offices and foundations.
Prior to this $100 million vehicle, Capria Ventures had raised $5.2 million for its Capria Accelerator Fund, which invested seed capital into general partners, and backed companies via a warehousing facility with equity or equity-linked investments.
Capria Emerging Manager Fund’s portfolio includes Singapore-based venture debt firm Genesis Alternative Ventures and India’s Arkam Ventures, and Unitus Ventures.
Richards revealed that the fund could be fully-deployed this year, and Capria will be raising more capital in 2022.
Capria’s network of investing partners collectively manage more than $400 million in assets deployed in early-stage and early-growth companies in Latin America, Africa and Asia. “We have now set up 20 different partnerships with fund managers so we’ve built a strong pipeline of capacity to deploy capital into both funds and co-investments,” he said.
