Private investors – Cyberagent Ventures, FPT Corporation, the Vietnam Silicon Valley accelerator and franchise programme operator Topica Founder Institute, – have been appointed as members of the steering committee for Vietnam government’s startup support scheme called Project 844.
Described as “Supporting the National Innovation Startup Ecosystem by 2025”, the project aims to set up an encouraging legal system including regulations for investments into startups by 2020.
By 2025, the government hopes to have about 2,000 startups covered under the project, of which at least 100 companies are likely to receive venture capital funding or get involved in M&A deals with an expected total transaction value of VND2 trillion ($89.7 million).
In order to achieve that milestone, Vietnam plans to set up innovation hubs in Hanoi and Ho Chi Minh City with facilities to provide services for startups as well as training programmes and activities to connect the startup movement with universities and research institutes. The hubs are expected to be set up within the next two years.
Most of the private investors in the sector are of the opinion that while it is not necessary for the government to make direct investments in startups (even as the country mulls establishment of a national venture capital fund), it is critical that the state support investment activities in terms of building a relevant legislation climate.
“It is a better place where we have partnership between the government and private stakeholders in running this project, as private investors and companies know better about the nature of business and what businesses really need,” says Han Ngoc Tuan Linh, CEO of the Vietnam Silicon Valley – one of the Project 844 members.
During the launch of Project 844 steering committee at TechFest – the national startup conference taking place over the weekend in Hanoi, the Vietnamese Ministry of Science and Technology also signed a memorandum of understanding with foreign partners, including South Korea’s Hebronstar Strategy Consultants and Jeju Centre for Creative Economy and Innovation, and Singapore’s Action Community for Entrepreneurship, to combine synergy in helping build a startup ecosystem in Vietnam.
Identifying government role
Vietnam, home to more than 90 million people and 600,000 small to medium enterprises (1,800 of which are startups), has set up a goal to become a startup nation as per Project 844.
Vietnam’s deputy prime minister Vu Duc Dam, who signed Project 844, has promised to relax investment and exit procedures as well as create a smoother path for startups to sell their products.
“One very important job to do is create partnership between startups and established companies, which should become clients of smaller businesses or connect the startups with their customers, and even become the acquirers at some stage,” Dam said as he addressed the conference.
“A large part of big corporations in Vietnam are state-owned firms. Therefore, the state has a major role play in supporting startups,” he noted.
Meanwhile, experts present at TechFest alleged that, independently from the help by the government, Vietnamese startups need to think bigger to be on the radar of investors, who are looking for scalable ideas, those that can reach the hundred million dollar valuation.