VCs commit $425m for investments in Vietnamese startups over next 3 years

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An amount of VND10 trillion ($425 million) will be invested in Vietnamese startups over the next three years, according to a new agreement signed between the Vietnamese government and local and international venture capital firms, at the Vietnam Venture Summit held on Monday.

Investors who are looking to invest in the burgeoning startup ecosystem in Vietnam include Golden Gate Ventures, Access Ventures, Burda Principal Investments, 500 Startups and Jungle Ventures, Cyberagent Ventures, among others.

Vietnam Venture Summit – a first-time initiative – is co-hosted by Vietnam’s ministries of investment and technology and science, and Singapore-based Golden Gate Ventures,  to connect investors to work together.

Several other partnerships have also been signed at the summit, including an MoU between the Ministry of Investment and Planning and Golden Gate Ventures to support the growth of Vietnamese startups, besides another tie-up between the ministry and SGInnovate to develop deep tech companies in the country.

In addition, VinaCapital at the Summit announced its co-operation with the $1 billion Mirae-Naver Asia Growth Fund, which will see Mirae Asset invest an undisclosed amount in VinaCapital Ventures and Naver work with its portfolio companies to facilitate their expansion plans.

Meanwhile, DTNI, another South Korean venture firm, has also signed an agreement to invest $1.4 million in Insignia Ventures-backed real estate platform Propzy.

“Vietnam is getting more attention from international investors and we believe there will be enough opportunities for them to deploy the committed capital,” Pham Hong Quat, director of the Ministry of Science and Technology’s market development division, told DEALSTREETASIA on the sidelines of the event.

“Investors need to be assured about the local policies and investment environment so that they are willing to invest in a country. That means there will be a lot to be done from the government down to the enablers of the ecosystem,” he added.

Vietnam had about 400 startups in 2012. The number grew to 1,800 in 2015 and around 3,000 in 2018. The funding capital into the ecosystem has also been increasing over the years, touching $890 million in 2018 – three times larger than that of the previous year.

“Over the last 3 years we have seen a significant increase in the number of Vietnamese companies raising their seed round…we’ll see many of those companies raising their series A soon. This, coupled with the fact that the number of newer startups is also on the rise, we are confident there will be more than enough Vietnamese startups to fulfil the investors’ pledged commitments,” said Vinnie Lauria, founding partner of Golden Gate Ventures.

“The fact that you have so many funds willing to commit to the local ecosystem means that there are companies here scaling fast, generating impact, and disrupting their industries,” he added.

While acknowledging the difficulties in terms of the investment procedures, investors attending the event said Vietnam has become one of their strategic markets in the region, given its young demographics, well-educated entrepreneurs and a government that is more open to the private sector.