Ho Chi Minh City, the southern metropolis of Vietnam, will launch a VND1 trillion ($45 million) support package for young businesses, including tech startups, the city’s department of science and technology departemnt reportedly announced at a recent meeting.
The fund is expected to be launched next month.
Eligible projects – preferably from the sectors of mechanics, electronics, chemicals, food production, finance, banking, insurance, commerce, transport, tourism, logistics, post and communication, real estate, healthcare, education and technology – will be granted VND2 billion ($90,000) each to run a prototype, according to newswire VnExpress.
The city will also kick off a programme to connect startup companies with investment funds, said the news site, adding that more than 20 foreign venture capital firms have expanded to Vietnam – where 1,800 startups are in operation, without citing any sources for the data.
Funding into Vietnamese startups have also come from a spate of other regional VCs, like Golden Gate Ventures, Gobi Partners and Expara Ventures, while IDG Ventures and VinaCapital DFJ are seeking exits for their portfolios. VinaCapital DFJ is also mulling a second fund next year.
Ho Chi Minh City, which already has a VND30 billion startup investment fund called HSIF, aims to support as many as 2,000 startup companies by 2020, which is part of the country’s grand plan to have a million businesses by the same time.
As per data released at the meeting, up to 90 per cent of startup projects failed largely due to their ability to commercialise the products. This is, in turn, because of the lack of support for these early stage companies.
Therefore, in conjunction with the support centre programme, Ho Chi Minh City is also planning a stock exchange for startups. This idea was proposed by government officials in mid-2016, and this week, the Ho Chi Minh City Stock Exchange (HOSE) moved a step forward by pressing the importance of such establishment.
“HOSE will assist in shaping the exchange and connecting the participants within the startup ecosystem, as well as support the exchange in terms of infrastructure and operating experience,” the government publication Vietnam News Agency cited Tran Dac Sinh, chairman of HOSE.