Following in the footsteps of venture capital (VC) firms and investors from Singapore and the US, Korean players are now making their presence felt in the Vietnam startup space.
Since 2015, Vietnam has seen increasing investor interest from companies like Yello Mobile. The company has invested in two Vietnamese startups CleverAds and price comparison firm Websosanh through its digital marketing and e-commerce units, Yello Digital Media (YDM) and Yello Shopping Media.
Vietnam is one of the five focus ASEAN economies for YDM; the others being Singapore, Indonesia, Thailand and Malaysia.
The startup ecosystem
Vietnam’s burgeoning startup space has already seen several new forays during the first three months of this year. The US VC firm 500 Startups has announced the launch of its $10 million micro fund that will provide funding to as many as 150 local startups. A spate of startups from different verticals raised funds, co-working space operator Toong, marketplace for tours Triip.me, on-demand maid service Jupviec.vn and notably fintech firm MoMo. which grabbed $28 million fresh investments from Goldman Sachs and Standard Chartered Private Equity.
Korean accelerators are fostering Vietnam-based startups by forming alliance with local incubators. HATCH!, a Hanoi-based startup supporter, recently reached an agreement of partnership with Korea’s Rehoboth Business Incubator.
Exchange programmes in universities and business associations, as well as connecting startups with investment opportunities, are part of their collaboration.
Similarly, in March, Korea’s ninth largest “chaebol” Hanwha Group brought its acceleration programme Dreamplus to Ho Chi Minh City. Earlier, Hanwha had an alliance with Vietnam-based accelerator Egg Group.
Launched in 2014, Dreamplus help startups to gain exposure to the regional markets by leveraging the Hanwha network. Several subsidiaries and units within Hanwha Group have invested in or become partners with startups including – the auto repair portal Carffeine (landing $500 million from Hanwha S&C), virtual touch screen developer Bignote, mobile marketing platform Mobidays and iParking, an app allowing drivers to find nearest parking lots.
The Korean conglomerate has also teamed up with Chinese peer-to-peer lending platform Dianrong to expand across Asia.
The startup ecosystem is strong and taking off really quickly in Korea, says Jess Erickson from 500 Startups in her blog post.
The Korean government is planning a 3.7 billion investment into its startups. This will be in addition to the thriving local and international startup investment ecosystem supported by VCs like Kcube Ventures, Bon Angels, SoftBank Korea, Altos Ventures, BlueRun Ventures and 500 Startups (with its 500 Kimchi micro fund). Several Korean accelerators like the SparkLabs and KSTARTUP are already well known in their respective focus areas.
These accelerators are clearly aiming a global reach, as Korea has recently announced its target to become one of the top seven startup accelerating nations by the end of this year.
The Vietnam Factor
South Korea, along with Japan, is Vietnam’s top trade partner. It is also the biggest investor in the country, with investment from Samsung alone amounting $14 billion. In Vietnam, Korean firms are more active in the sectors of technology, finance, retail and property development, with large corporations like like LG, Shinhan Bank, Posco, Lotte, Daewoo and Kumho having their footprint in the company across these industries.
Korean investment in tech has been prolific, however the major part of it was direct investment of Samsung into factories and R&D centres.