As the COVID-19 global crisis pushes for faster adoption of artificial intelligence-driven technologies, Vietnamese startups are looking at keeping pace with the trend.
Vietnamese AI-driven startups, which have seen sporadic deal activity in recent months, are deploying their venture funding proceeds to add firepower to AI-building capabilities and to increase their tech talent count.
For instance, Cinnamon AI, a Japanese startup that uses AI to improve workplace productivity, said that it has expanded its team to 150 members in its Vietnam offices; 70 per cent of the new additions are in tech roles.
Cinnamon AI is deploying part of the $12-million Series C round that it raised from D4V and Pegasus Tech Ventures in April to acquire talent and to set up 300-seater office space in Hanoi and Ho Chi Minh.
Cinnamon AI chairman Hajime Hotta said, during COVID-19, clients are looking for solutions that help expand their businesses without increasing human resources.
“We’ve been releasing new products to catch up with consumers’ unique behaviors in the COVID-19 situation. There are many opportunities for AI to create those innovations,” he added.
Meanwhile, JobHopin, a Vietnamese online recruitment startup, which bagged $2.45 million in a Series A funding round in May, said it will use part of the proceeds to advance AI capabilities that allow recruiters to source and connect talent more efficiently.
JobHopin’s latest round was funded by South Korea’s SEMA Translink Investment, Boston- and Tokyo-based Edulab Capital Partners and Japanese tech and HR services firm NKC Asia.
The company claims that its Bunny AI can evaluate CVs in variable formats in Vietnamese and English, while progressively learning from search preferences. With Bunny AI, the startup claims companies can process 10 times the CVs that an employee can in a day.
“The application of AI in entrepreneurship is not only about paying for modern technologies but also to have more focused goals,” said Kevin Nguyen, founder and CEO of JobHopin.
Leading technology corporations in Vietnam, such as FPT or Viettel to conglomerates like Vingroup have started their Al journey specifically in medical, transportation, and e-commerce. In August, the military-run telecoms group Viettel launched the Viettel AI Open Platform.
Post Covid-19, startups in fintech, health tech and edtech sectors will be key beneficiaries as they develop AI applications in their businesses.
Wee Digital, an AI-driven fintech startup that bagged a seven-digit dollar sum from VinaCapital Ventures and South Korean VC firm InterVest in September, plans to boost its AI application FacePay to help customers dematerialise the payment process using only their biometrics face features.
“We aim to enable millions of Vietnamese users to our FacePay technology. It will be thrilling to find out that Vietnamese are among the first ones in the world to use their biometrics face features to process payment every day,” said Christian Ng, founder and CEO of Wee Digital.
COVID 19 has promoted consumer and living behavior towards digitalisation, thereby creating a wave of user growth for technology application service platforms, including heath tech applications, according to Tuan Cao, founder and CEO of Genetica Company, which applies AI to decode genes.
The company, which was incubated in Silicon Valley, aims to expand in the Southeast Asia market after it set up a presence in Singapore and the US.
Meanwhile, AI edtech company ELSA, which was co-founded by Vu Van and backed by Google’s AI fund and Monk’s Hill Ventures, has hit around 11 million users and tapped new markets as international lockdowns have prompted a new need for tech-based learning solutions, according to CNBC Make It.
“Covid really opened up a segment that is new for us,” Van told the media. “There’s a paradigm shift among parents that there’s a different way of learning.”
In terms of local investors, Next100, the venture capital fund of NextTech Group, in April invested $500,000 in Chatbot Vietnam JSC that owns Bot Ban Hang, an AI-driven platform connecting advertisers and sellers.
Meanwhile, homegrown VC firm DO Ventures appointed Thuc Vu, an AI expert, co-founder and CEO of AI and robotic firms OhmniLabs and Kambria, as a venture partner, a move seen to indicate greater interest in the space.
“At Do Ventures, we focus on startups that can integrate technology into their products and AI is among some of the core technologies that can be applied in almost every industry. We believe the ability to utilize deep tech in their products will enable startups to fully unlock their potentials,” Vu told us in an interaction.
VIETNAM AI LANDSCAPE REPORT 2018 released by rubikAI and G&H Ventures
Vietnamese startups face the biggest challenge of achieving a balance between serving local and global markets.
Technology products and services from Vietnam have to compete with other products in the world. The superiority in core technology is a prerequisite for continued competition in this sector, according to Cao.
VIETNAM AI LANDSCAPE REPORT 2018 released by rubikAI and G&H Ventures
While Vietnam is targeting to become the AI production base in the value chain, it faces inadequate IT infrastructure and lack of preparedness on part of local enterprises to absorb the AI technology.
“The market is not really ready for an AI wave due to lack of data, infrastructure and human resources. Therefore, AI companies will face certain difficulties,” said Le Han Tue Lam, General Manager of South Korean VC firm Nextrans.
She emphasised that it will take many years for companies to digitally transform their operations, culture, and define long-term data strategy.
Meanwhile, Vu indicated that as investments in AI takes longer in order to realize its efficiency, it is important to have funding support from investors who have a good understanding of the sector and a determination to build the right product.
“There have been challenges in data shortage or the ability to correctly apply tech stack to achieve the desired outcomes, and Do Ventures is looking to invest in startups who can take care of those issues,” he added.
AI investments in Vietnam lags other countries in the region.
While Singapore came on top with $68 worth of AI investment per capita last year, Thailand, Malaysia, Indonesia, Vietnam and the Philippines scored less than $1. Vietnam at just 3 cents and the Philippines at less than 1 cent were among the lowest in terms of AI investment per capita, according to a report by Kearney and Singapore’s EDBI.
“This is the right time for Vietnam’s AI companies to speed up the development process before foreign players jump into the market,” Nextrans’s Le opined. She believes that the Vietnamese market is not large enough for the global AI majors to foray into.
“I’m seeing many large companies with traditional business models looking to create the right AI applications,” Cao said.
Per Southeast Asia’s Internet economy 2020 report, released by Google, Temasek and Bain & Company, Vietnam’s internet economy grew 16 per cent from last year to $14 billion. Vietnam’s digital economy grew the most, followed by Indonesia, which clocked an 11 per cent growth to $44 billion.
Vu said that one other interesting aspect of Vietnam’s AI community is that there are many Vietnamese AI experts working at the top technology companies like Google, Facebook, Amazon, and LinkedIn. And, many are returning to Vietnam to contribute to the development of AI in the country, adding to the growth potential.