Vietnam Venture Summit 2019: Insights

20 June 2019 | VIR (19 June 2019) features the Vietnam Venture Summit 2019 in Hanoi and Ho Chi Minh city. In addition to plans of the Vietnamese Government, the quotes of investors and founders are insightful

Three key action plans focusing on:
(i) developing qualified human resources to create an innovation-based economy ==> establish the Vietnam Innovation Network
(ii) supporting innovation activities among businesses ==> promote innovation activities among businesses and connect startups with powerful enterprises
(iii) unblocking capital sources for innovation ==> venture investment funds in the region and the world to discuss with startups and Government

Justin Nguyen – Partner, Monk’s Hill Ventures
I believe that the startup market in Vietnam started getting interesting around five years ago, driven by strong GDP growth, widespread smartphone usage, supportive regulations, a young population, and the rising middle class.

A lot of venture investors are now looking at Vietnam, after they realised that bigger markets in the region, like China, have slowed down. The tech talent in Vietnam is also amazing, and we often joke that any startups in the ASEAN should have a Vietnamese engineer. In terms of challenges, I think Vietnamese startups have two significant problems. The first is how to find mid-level managers, because there’s a great shortage in the local market. Second, once they get off the ground, many startups are also struggling to scale up their business, which is partly driven by the lack of skilled middle-managers. Scalability is very important for investors, so I believe this is something Vietnamese entrepreneurs will have to tackle soon.

Linh Pham – Founder, Logivan
Startup founders usually have to go out a lot to raise funds, which can be stressful. From my experience, venture capital investors know each other very well, and I often try to work with an investor who is a “super connector”. By doing this, I reduce the time spent on meeting other investors, as this super connector will help me meet the right people and I don’t have to waste time looking for the unsuitable ones. So instead of going around fundraising, I can focus on managing the company.

Also, it’s true that a lot of investors say they want to add synergy and value to the startup community, but I think entrepreneurs should keep in mind that venture investors have many companies in their portfolio so they can’t dedicate too much time and effort to just one startup. It’s all about managing expectations from both sides.

That said, our experience with foreign investors so far has been fantastic. We maintain good relationships and they show us the kind of respect that entrepreneurs deserve.

Eddie Thai – General partner 500 Startups Vietnam
Many investors used to be reluctant about investing in Vietnam’s startup scene because of various challenges in terms of regulations, human resources, and so on. However, things have changed greatly in the past few years, and real data has shown the positive trajectory of investments into Vietnamese startups. For example, funding has increased by 400 per cent in only a few years, and we even have a number of Series C or D rounds coming up. In fact, Vietnam is so hot that nobody wants to miss the boat now. I believe that investments of $15 million are likely to be popular in the future. The early movers now have a clear advantage in this booming scene.

We talk with various startup teams on a weekly basis, and we’re glad to see many founders now becoming more familiar with how the market is run. There can be risks of overheating and investors should be cautious, but I think the best startups in Vietnam can definitely survive the next decade or so.

Linh Thai – Partner, Vingroup Ventures
We want to invest in startups that can collaborate with the Vingroup ecosystem, because Vingroup operates in a wide variety of sectors and we believe that this is the best way we can assist entrepreneurs in their growth path.

It also acts as a certificate of excellence for these startups when they want to seek funding from other investors.

When looking at what to invest in, we want to see strong teams with a marketable product. Ideas are great and Vietnam’s tech skills are definitely strong, but the key here is whether the entrepreneurs can sell them to the market.

We also want to see whether these products and their owners have the potential to venture outside Vietnam later.

For new investors to Vietnam, we’d advise against going all alone. We think it’s best for them to invest or co-operate with an existing fund in Vietnam first, before they figure out their own strategy and start to expand.

Tran Nhat Khanh – Partner, VinaCapital Ventures
Ten years ago, it used to be very difficult for me to discuss business ideas in Vietnam with my father, who himself ran a small company. There were a lot of challenges in starting a company here, and I’m happy to see that things have changed.

I also used to work overseas and the more I remained there, the more frustrated I was with the stagnant markets there. That prompted me to return to Vietnam, where opportunities are growing. I’ve also noticed many wealthy businessmen here who are willing to invest in the future generation of leaders, especially in niche areas.

Before investing, we also ask ourselves how we can create value for the startup, and whether two sides can work together and share the same long-term vision.

Founders in Vietnam are becoming more sophisticated these days, and they no longer hesitate to ask us in a very straightforward manner about the kind of network and know-how we can bring to their business.

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