HATCH!, a three-year old Vietnam based startup incubator, is expanding its footprint across Vietnam and partnering other international accelerators.
HATCH!, which inked an MoU with South Korea’s Rehoboth Business Incubator last year, will jointly organise exchange trips for startups to help them access opportunities in each other’s market.
Rehoboth has brought two Korean startups to Vietnam and both have also kicked off entrepreneurship exchange in local business universities, like Yonsei, RMIT and Foreign Trade University.
“Having signed the MoU, HATCH! expects Vietnamese startups will be exposed to foreign partners, mentors, advisors and investors, paving way for a regional expansion,” said Vu Anh Ngoc, co-director at HATCH!, outlining the incubator’s plans for 2016.
Other details of their partnership are not disclosed due to the terms of agreements. However, Ngoc revealed they will roll out new cooperative agreements. “HATCH! has assisted several Vietnamese startups to join international initiatives, including SLUSH Impact (Finland) and Seedstars World (Switzerland). Thus, Rehoboth expects there could be such partnership between us,” Ngoc added.
In the past, it has partnered with Innovation Partnership Programme between the Vietnamese and Finnish governments, Tigers@Mekong and the UNDP.
Beefing up angel network
HATCH!, which launched its angel network in April last year, is planning to activate it by attracting more overseas investors to its fold.
In fact, foreign angel investors are doing a lot more deals than Vietnamese angels, noted co-director Pham Quoc Dat.
“International angel investors are interested in the Vietnamese startup space, but they have not made a significant entry into the market yet . HATCH!’s angel network is aiming to facilitate this,” he said.
In more developed market, angel investors are accredited. It is not existent in Vietnam yet. ASEAN countries like Malaysia offers beneficial tax policies for angel investors, added Csaba Bundik, advisor for HATCH!, stating that the Malaysian Business Angels Association had 105 accredited business angels within six months of setting up.
Bundik hopes that Vietnamese government too will work on relaxing taxes on angel investments.
More co-working spaces
HATCH!’s model of operation continues with three pillars of community building, incubation and co-working spaces.
However, over the past three years, the incubator has focused on community building and mentorship for local young startup companies. In 2016, it is targeting to open more co-working spaces across Vietnam, particularly in central Da Nang City and Ho Chi Minh City.
Additional co-working spaces will not only serve to host its incubatees but also facilitate the growth of digital nomads in big cities.
Like HATCH!, Toong, another co-working space operator, is also looking to expand across the country.
According to a report by startup accelerator Topica Founder Institute, Vietnam has four incubators for startups, including Hub.IT (which Topica has acquired), HATCH!, Hanoi-based 5Desire and Becamex Technology & Innovation Center (BTIC) in the south.
Vietnam’s startup ecosystem decoded
Vietnam tech startup space is young and “it’s a new ecosystem,” said Bundik. Vietnam does not have many serial entrepreneurs and startup founders are mostly young people, even students, without much working experience.
Addressing the issue of whether the startup wave is just a hot fad in Vietnam, Bundik said, he saw a lot of young people with good education coming back from abroad to start up their own ventures, which means “they are becoming more active in the market to tackle the actual needs.” So, it is not 100 per cent true to say startup in Vietnam is just fashionable.
To some extent, there can be a tech bubble, when too much capital is injected into the market and private company valuation is inflated, Dat pointed out. “But Vietnam is nowhere near that bubble, because there is still an absence of big investors, plus the number of (active) startups is small. It is just a starting point of a new wave of entrepreneurship, and Vietnam will see a lot of exciting events coming up.”
According to Dat, HATCH! itself is facing the challenge of finding mentors. This is because many of the mentors are busy hands-on entrepreneurs themselves. What is also required for startups, apart from mentorship, is co-founders, he added.