Singapore-based venture capital firm Quest Ventures plans to invest up to $10 million in digital economy-focused companies in Vietnam over the next three years.
The venture capital firm, which is on track to hit the first close of its $50-million early-stage Southeast Asian fund this month, is scouting for 10 Vietnamese companies in both B2C, direct to consumer lifestyle enhancers and B2B business transformation niches, said a senior executive of the firm.
It will target investments in post-seed to pre-Series B rounds with ticket sizes varying between $500,000 and $1 million.
“We have been tracking Vietnam’s digital economy evolution and the increasing number of players. The market has grown fast with dedicated support from the Vietnamese government and angel networks, as well as overseas funds who have missed out on Indonesia,” Jeffrey Seah, partner at Quest Ventures told DealStreetAsia on the sidelines of Vietnam’s Techfest 2019 in Ha Long Bay.
The internet economy in Vietnam is booming, thereby recording a growth rate of over 40 per cent year-on-year, according to the latest report jointly launched by Google, Singapore’s state investment firm Temasek, and Bain & Co.
“Fintech has been the category buzzword for Vietnam in 2019, the challenge for the funded startups will be to have a meaningful role to partake in drawing up regulations with the Vietnamese government,” said Seah.
He also pointed out that logistics is a close second generating investor interest in 2019. With an accelerating GDP growth of over 7% driven by infrastructure spending and macro-economic wars, this surrogate public goods sector will flourish. Hanoi and Ho Chi Minh are different in the construct in the multidimensional history of Vietnam, so the VC firm foresees logistic players developing specialisation.
“We have also observed interest in agriculture, e-commerce, healthcare and education sectors,” added Seah, who is one of the 3 partners of Quest Ventures along with Goh Yiping and James Tan.
Quest Ventures first announced the launch of its $50-million early-stage Southeast Asian fund in April this year. The vehicle marks the first time the VC firm is formally raising capital for a fund, having previously invested out of the personal capital of the partners and angel investors via specialised investment vehicles.
Since 2010, Quest has added over 50 companies to its portfolio including Carro, Carousell, 99.co, ShopBack, StyleTheory, Hepmil and Glife. It has more than 15 companies, which have operations in over three markets, Vietnam being a tier 1 operating country.
The VC firm, which has previously said that it plans to invest in about 40 companies across the fund’s 10-year tenure, also runs innovation labs and corporate digital transformation accelerators. It has also partnered with companies globally with their corporate venture capital arms.