South Korean startup booster Lotte Accelerator will expand and diversify its investment capital in Vietnam’s startup ecosystem this year, said Jin Sung Rhee, CEO of Lotte Accelerator at Demo Day event held by Vietnam Silicon Valley (VSV) on February 1.
“We have completed our commitment to invest $1 million in Vietnam’s startup (ecosystem) through a partnership with VSV called Vietnam Silicon Valley Accelerator (VSVA),” Rhee said, adding that ten potential startups have been selected for investment to perfect their business models so far.
Rhee emphasized that the fund will look at sectors such as technology, finance, and retail as it plans to diversify its investments.
Lotte entered Vietnam in 1998 and has since then expanded in the country with 12 subsidiaries. It started to explore the opportunities in this Southeast Asian nation’s startup space in 2016 with the “Lotte Accelerator Awards”.
Founded in 2015, the South Korean chaebol launched its $85 million Lotte Accelerator Fund I. It invests 20 million to 50 million Korean won ($17,700-44,200) in each startup.
Established in 2013, Vietnam’s government-backed accelerator VSV has incubated 52 startups in Vietnam so far.
Thanks to $1 million investment from Lotte Accelerator, it has doubled its pre-seed funding for each portfolio startup from $10,000 to $20,000, while keeping its holding rate unchanged at 10 per cent.
The new funding scheme is expected to scale up more quality startups, encourage young companies to operate in a more professional manner while reducing risks for them.
According to an unofficial statistic, Vietnam, a 90 million people country, has only 3,000 startups. “Private investment for Vietnam’s startup remains limited,” Thach Le Anh, Principal of VSV told the portal in an interaction. “In some other advanced countries in the region, 80 per cent of funds for startup research comes from private investment flow but in Vietnam, the number is very small.”
In 2016, VSV and US technology giant Microsoft entered a partnership to accelerate the necessary support as well as tech products and services for the startup ecosystem in Vietnam.