From lacking a pool of sophisticated investors three years ago to gaining increased attention from regional venture capital firms and spawning “Viet money” funds, Vietnam’s startup ecosystem has come a long way.
Another positive indication is that VC firms active in the country — these include the likes of Cyberagent Ventures, Gobi Partners, Spiral Ventures, Fenox Venture Capital, Captii Ventures and Cocoon Capital — include both early-stage and late-stage investors.
After DFJ-VinaCapital, which was Vietnam’s first country-focused fund, 500 Startups launched its $10-million Vietnam fund. The fund was closed recently at its hard cap of $14 million.
2018 also reaffirmed the availability of “Viet money” with the advent of VinaCapital Ventures, Vingroup Ventures, Startup Viet Partners and Viet Capital Ventures. ESP Capital, a $20-million fund founded by Vietnamese business people, was launched in 2017.
Here’s a rundown of the top Vietnam-focused venture capital funds development in 2018:
The $100-million VC
Ho Chi Minh City-based asset management firm VinaCapital launched VinaCapital Ventures in August 2018, a $100-million holding company to invest in tech startups. This is VinaCapital’s second venture capital arm after a partnership fund with Draper Fisher Jurvetson was fully invested.
VinaCapital Ventures was one of the top 15 VC funds by largesse in Southeast Asia during the year, and is Vietnam’s largest venture capital vehicle to date, according to DEALSTREETASIA data.
Focused on logistics, fintech and digital media, the firm will be writing cheques of about $2-10 million. Its holding company model means it faces lower exit pressure compared to other traditional VC firms. VinaCapital Ventures has already made investments in logistics startup LOGIVAN and ride-hailing service FastGo. VinaCapital’s previous VC fund had made its name with its successful IPO exit of media firm Yeah1.
Given the improvement of the local tech sector in recent years, the firm is positive that the fund size fits deal flow in the country. In a recent interaction with DEALSTREETASIA, VinaCapital CEO Don Lam said, “There is a lot of deal flow in the market, a clear sign of how active this space now is. Also, to provide some perspective, when we launched our DFJV fund back in 2007, the average investment was less than $1 million; today, the average investments are $3-5 million, and we’re likely to see some that are more than $20 million.”
500 Startups’ $14-million Vietnam fund oversubscribed
Silicon Valley’s early-stage investor 500 Startups closed its Vietnam fund at $14 million, surpassing the original target of $10 million announced in 2016. The firm said the Vietnam vehicle was oversubscribed, with limited partners including several Korean conglomerates.
500 Startups Vietnam plans to invest in up to 100 early-stage tech companies by 2020. In addition, it will increase the cheque sizes, previously in the region of $50,000-100,000, to around $100,000-250,000.
The Vietnam arm of 500 Startups has also launched its country-focused accelerator in partnership with its limited partner GS Shop. The Saola Accelerator will invest $100,000 in each startup selected under the programme.
Startup Viet Partners launches $5-million debut fund
Startup Viet Partners, founded and funded by Vietnamese entrepreneurs, was unveiled in August 2018 with a $5-million debut fund focused on early-stage startups.
The firm said it will focus on B2B and B2B2C businesses, and startups providing tech-enabled solutions for Vietnamese SMEs.
Startup Viet Partners is targeting pre-Series A investments between $500,000 and $1 million and is looking to invest in as many as four startups per year.
ESP Capital hikes early-stage funding size
ESP Capital, a homegrown fund established in 2016, continued to strike new deals in 2018 with investments in medtech startup eDoctor, live streaming startup Uiza and food media company Cooky.
Having invested a total of $1.4 million in nine Vietnamese firms to date, ESP Capital also aims to expand its funding activities across Southeast Asia. The VC firm also told DEALSTREETASIA that it wanted to increase investments in pre-seed and seed rounds to around $300,000 per deal.
The firm invests in startups with products and services targeting the millennials and those engaged in career development, housing, shopping, healthcare, education, entertainment and travel.
Viet Capital Ventures launched
Viet Capital Ventures appeared in the news in 2018 when logistics startup EcoTruck announced raising a $1.7-million funding round from investors including Access Ventures, NextTrans, Future Play and the Vietnamese VC fund.
On its website, Viet Capital Ventures says it is focused on seed and Series A investments in Vietnam’s three high-growth sectors of retail, healthcare and education.
Viet Capital Ventures is an instrument of Ho Chi Minh City-based VietCapital Asset Management. Its leadership team includes Pho Pham, who previously served as a vice president at IDG Ventures Vietnam, and Kent Nguyen, the former head of engineering at Grab Vietnam.
Vingroup Ventures launched
Vingroup Ventures, a unit of Vietnamese conglomerate Vingroup that will operate consultancy and support services for startup companies, recently joined the fray.
Vingroup Ventures is led by Linh Thai, a seasoned investor who had a stint at VinaCapital as its head of strategy and operations.
Vingroup Ventures was only one of Vingroup’s several tech development initiatives this year. Having decided to transform into a technology major, the conglomerate has developed its own ecosystem of software businesses, big data and high-tech R&D centres, smartphone manufacturing and a proposed $300-million venture capital fund.
Vingroup has not announced any updates about its intention to establish the $300-million fund.
A new $10-million fund in the offing
DEALSTREETASIA has learnt that a Hong Kong-based fund manager is mulling a $10-million vehicle dedicated to Vietnam’s early-stage startups. The fund is starting to hire a local team. It is understood to have invested in one Vietnamese company already.