DSA Summit: Singapore VC Monk’s Hill targets Series A investments in Vietnam

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For Singapore-based venture capital firm Monk’s Hill Ventures, which has invested in Vietnamese-founded robotics company OhmniLabs, it is the right time to tap the potential of the 90-million plus population country.

While the majority of venture capital funding rounds in Vietnam’s burgeoning startup ecosystem are at the pre-seed and seed stage, Kuo-Yi Lim, managing partner at Monk’s Hill Ventures, said the firm was not looking at very early-stage investments in Vietnam.

 A typical Series A round in Vietnam is in the range of $1-3 million, while there have been instances of rounds in the range of an eight-digit US dollar figure.

Series A investments accounted for the biggest proportion (37.1 per cent) of the total funding landscape in Vietnam in 2015, according to Topica Founder Institute. In 2016, the number of deals at $1-5 million continued to be the largest with 19 transactions.

Deal flow in this country had enough quality for investors like Monk’s Hill Ventures, Lim told DEALSTREETASIA on the sideline of the Asia PE-VC Summit 2017 held in Singapore on September 21 and 22.

However, he pointed out one of the challenges to VC investors in the country was the state of later stage funding. “Will Vietnam be interesting for investors at that level?” he questioned.

Series B and C rounds have always made up the smallest percentage in terms of volume. A lot of startups, after raising their early stage funding, could not scale up due to the human capital issue and the mindset of the founders, according to Tran Tri Dung, innovation specialist for SECO Entrepreneurship Programme, a Swiss initiative.

Foreign investors in Vietnam are also confronted by the country’s underdeveloped regulations for a number of industries, and the loose shareholding structure in companies, according to Lim.

Thus, Lim bets on the strong presence on the ground to source deals and to find good founders.

Monk’s Hill Ventures hired Justin Nguyen as its Vietnam-based operating advisor. Nguyen, an overseas Vietnamese, is an entrepreneur and venture partner formerly based in Silicon Valley and Shanghai.

“In addition to a worldwide set of talents, we look for presence in quality, and these guys bring both. (…) It is critical to have local partners,” Lim said.

Commenting on the attractiveness of the Vietnam market, he added that along with tech talent and an exciting demography, Vietnam is also interesting because of its diaspora community, who have an strong impact on the local ecosystem.

Monk’s Hill Ventures portfolio company OhmniLabs is founded by Thuc Vu, a Standford PhD serial entrepreneur who has also joined a spate of projects in Vietnam.

Lim said his firm did not target a specific number of investments in Vietnam. Instead, “investments are driven by the types of founders that we’ve found, and the way they can fuel a high conviction,” he said.

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