The second wave of business startups in Vietnam (after the first ones emerged around 2007-2008) is attracting more attention both from the government and the international community.
Aside from partnering the Vietnam Silicon Valley project, the Ministry of Science and Technology, Vietnam has also tied up with the government of Finland, for providing financial and technical support to these startups, with plans of taking them international.
The collaboration between Vietnam and Finland – Innovation Partnership Program (IPP) – is providing seed funding , as well as connections and training for startups in Vietnam. IPP also plans to build capacity of stakeholders through entrepreneurship and innovation training programs.
The program, in its second phase, is already on a lookout for the best startups in Vietnam, says innovation advisor Riku Makela (IPP) in an interaction with DEALSTREETASIA. Excerpt from the interview:
What is your criteria for funding a startup?
We chose the most promising young companies who are serious about innovative growth. We help in early stage where they have just started to develop products or services. There is a huge gap (in seed funding) especially for startups requiring between $50,000 and $100,000; I mean there is hardly any funding available.We compared this gap to our capabilities, resources and donors as well as local host ministry and decided to enter the space.
We are also interested in innovative growth companies, and startups that incubated by large corporations and universities.
What are the must-have elements for a startup to be feasible?
It has to have a good team that can execute the first phase of the project and can take on the role of execution to the later stages; be able to develop business development plans. Another key factor are the financial capabilities. We only bring in the seed money, they (the startups) should have the ability to look for additional money.
How do you judge the potential of Vietnamese startups?
We have met many promising startup teams. In fact, the most promising ideas have been presented by younger individuals, 35 or less, who have had some exposure abroad. They seem to be serious about doing business in Vietnam. They already have good connections both in Vietnam and internationally.
Other interesting set is the medium-size companies, who have innovation divisions. This is most visible in the IT sector, where some are planning to spin out good ideas and the team as a startup offshoot of the larger company. Here, they already have the financial backing from the companies and business connection with customers and so on.
In general in Vietnam, people here are adopting a vision of international growth startups.
What are the possibilities of Vietnamese young startups going international?
Most of the people we have met, initially, had business plans central to Vietnam; but are open to going international at a later stage. This is a key issue, the defining factor in our valuation. We do not support those who do not have the vision of expanding to the international market.
How many projects has IPP sponsored so far?
We have just started the second phase of this program and have started to receive the “expressions of interest” a couple of weeks ago. A few hundred have already applied for our first funding round, to be launched this spring. We plan to select 20 of the those who have applied for funding and training.
Are there any investors showing interest?
We have been talking to several international investors and they are highly interested in our pipeline, because we initiate promising early-stage startup teams, and we want to provide that pipeline to investors.