Indian social enterprise incubator Villgro is planning to enter the Vietnamese startup ecosystem, its first country in Southeast Asia, by seeking for partners in nurturing local impact investment.
The fund is expected to finance a social startup with up to $250,000 once it is established.
In an interaction with DEALSTREETASIA, Ngoc Huynh, who is working in Villgro’s initiative to replicate the fund’s model in Vietnam, revealed that the India’s oldest social enterprise incubator will appear in the local market through the franchising model.
Therefore, it is looking for Vietnamese entrepreneurs, who are keen on joining the global Villgro Impact Incubators Network (VIIN), to be directors of its Vietnam unit.
The Indian model offers funding from $10,000 to $250,000 for three stages of a social startup development – including pre-product, pre-revenue and pre-scale stages.
It is also targeting four sectors of education, healthcare, agriculture and energy.
According to Ngoc Huynh, Villgro Vietnam aims at funding the startups until a series A round before investment exits, normally a time frame of three years. “By that time, the companies will become attractive enough for venture capitalists. Our main goal is to spur up the awareness of social impacts among Vietnamese enterprises and to prove that social startup can succeed,” she said.
For the pipeline, founders of Villgro Vietnam are expected to be chosen in July so that the fund can disburse by the end of this year. It plans to support some three projects within the first year of operation. Villgro’s replication team in India, headed by founder and CEO Paul Basil, will support the founders in Vietnam to set up the incubator and transfer knowledge on the incubation process.
Growth of Villgro Vietnam will be sustained through a mix of revenue streams, such as grants, exits from investments, fees, etc.
Since 2001, Villgro has supported 103 innovators, secured $14 million in follow-on funding, created 4,000 jobs and touched over 6.8 million lives. Out of the Indian territory, it has reached Kenya. For Vietnam, it says to position Villgro Vietnam brand as a trusted, efficient incubator of social enterprises.
Although the franchise will allow the Vietnam-based unit to operate as an independent fund, Ngoc Huynh revealed that a mutual fund, which will facilitate for social startups in Villgro’s VIIN system, has been on the Indian innovation consortium’s schedule.