So, you’ve just landed in Hanoi, the weekend is booked with trips to the Citadel of Thang Long, maybe the Ho Chi Minh Mausoleum or a nice day exploring Ba Vi National Park. But, this is a business trip, and you need a crash course on the important startups, where to find the young talent and which investors are worth your time.
Here you go:
For better or for worse, Vietnam is home to a fallen angel. It looked like a bird and its wings were flappy. Just as recently as October, Vietnamese press wrote the startup scene is just now beginning to go past ‘flappy’. So, let’s check out the companies ensuring the legacy of Flappy Bird is one of a martyr.
Foody.vn — Foody.vn is Vietnam’s Yelp and, while the company does not disclose its investment amounts, in July, it raised a Series C round. Also, the Series B was reported to be “seven-digits”. Based in Ho Chi Mihn, one nifty little feature for Foody is the decision to prominently display coupons for restaurants on the homepage.
Magestore — A developer and provider of leading American marketing extension builder Magento. Based in Hanoi the extensions aim at marketing, ecommerce, interface and even improved Facebook integration. Founded in 2010, it boasts 2,500 clients. It will be interesting to see how Magestore moves forward after Magento re-launched as an independent company on November 2.
Tappy/Weeby — Tappy, a Vietnamese social networking site was bought by Silicon Valley-based cloud gaming platform Weeby.co for ‘seven-digits’ worth of stock and cash in May. Tappy aims to integrate the real world with social networking. The goal is to connect people in a location with cool people and activities nearby.
TicketBox — Originally branded as Keewi, TicketBox draws comparisons to Eventbrite. It is especially interesting in Vietnam, where event organisers don’t have huge distribution channels so the online platform adds a relatively easy way to get the word out.
The TicketBox payment solutions are top notch, another factor contributing to the company’s success.
Triip — Started as a way for tourists to get a more authentic local experience, this company has branched out to 84 countries. It is equally a way for creative individuals to become ‘tour guides’ as a vehicle for the ‘local experience.’ The company has been so successful it has inspired imitators, such as the hyperlocal version in Hong Kong called Sam the Local.
VNG Corporation — The Unicorn of Vietnam. The country’s largest Internet company is worth over US$1 billion. Founded in 2004, it grew out of the first generation of Vietnamese startups. VNG has moved beyond the ‘startup’ moniker and now employs around 2,000 people. The company focusses on e-commerce, entertainment and social media.
VC Corporation — This online e-commerce — or M&A depending how one chooses to view the business model — company boasts 22 companies in its portfolio. They range from beauty to online gaming; from used cars to live television. When running around Echelon Thailand, and you bump into a Vietnamese e-commerce company, it may be a good idea to check it if is a VC Corp. subsidiary.
FPT Group — Comparable to a traditional tech company like Oracle, FPT group was founded in the early 1980s. Today, it is a leading technology corporation and puts education as a corporate value. It has close connections with companies like Apple, Microsoft and Lenovo.
IDG|Ventures Vietnam — American tech giant IDG is the biggest player in Vietnam’s investment scene. It has been involved in Vietnam since the early 1990s. In 2004, the company launched a full-blown venture firm dedicated to the country. The firm has invested in more than 40 companies, including VC Corp.
500 Startups — This VC is so bullish on Vietnam it could be in a rodeo. In August, they hired two Partners to facilitate growth and said the goal is to grow the country portfolio to 20 companies by 2017 from four this year.
500 startups has investments in both Tappy and TicketBox. As an early-stage investment company, 500 startups is making it clear it views Vietnam as a market ripe for growth.
PVNI — The only locally-incorporated investment firm on this list, PVNI has been around since 2007. The company focusses on early-stage startups and offers investments between US$2,000 and US$7000 at the idea stage.
PVNI is more than willing to branch out of tech, notably investing in food franchise BanMiViet. But it did invest in MyProClub, a platform to connect investors and entrepreneurs in Vietnam. “Our current focus is high quality consumer goods and services, green food, high tech, social media and education,” the company’s website reads.
Incubators, accelerators and co-working spaces
Vietnam Silicon Valley — This accelerator is backed by the Ministry of Science and Technology and was founded in June 2013.
The accelerator invests at least US$10,000 in each company, lasts for four months and accepts 10 companies per batch. Headquartered in Hanoi, the accelerator is expanding its Ho Chi Minh operations with a working space built around a garden.
Egg Agency — Egg’s focus is its distribution network. The accelerator works to connect companies with marketing verticals, distribution and outsourcing channels as well as mentors.
It is excellent at introducing startups to large corporations that may be looking for a partnership. The Ho Chi Minh accelerator is also excellent for having a spa, gym and pool.
Hatch! Program — Let’s call Hatch! a ‘co-working plus’ space. It runs a co-working space for freelancers and startups called Hatch! Nest, but also has education programmes like Hatch! Coach, Code Camp and events like September’s hackathon for social good.
The Hanoi-based space is connected to a network of angel investors who offer workshops.
Hub.IT — This well-known Hanoi co-working space has been helping startups get connected since 2013. The space boasts mentors like Jeffrey Paine from Golden Gate Ventures and Ronnie Wee, Founder and Managing Partner of IncuVest Private Limited.
If a startup needs to travel for business, Hub.IT will arrange another space for the team to work in.
A major reason why Vietnam is attracting attention as a young exciting startup hub is that the general economy is trending upwards.
The Asian Development Bank cites economic growth hovering at about 6.5 per cent for 2014 and 2015. Foreign Direct Investment has been mostly focussed on manufacturing and has been both plentiful and steady.
Vietnam’s central bank devalued the dong (VND) three times this year to boost exports and inflation is rising at 2 per cent.
The Economist Intelligence Unit cites a recovery that remains on track and suggests economic liberalisation as a means to deepen ties with the West.
In 2016, the ruling Communist Party will hold its 12th National Congress, which will be important for guiding economic, political and social policy moving forward.
As with much of Southeast Asia, Vietnam has a problem with endemic corruption. Scoring 31 out of a possible 100 points in Transparency International’s 2014 corruption perception index, Vietnam ranks 119th in the world.
In Asia, that puts Vietnam below Indonesia and only slightly above Nepal and Pakistan.
Gan Integrity solutions wrapped it up succinctly, “Vietnam is an attractive destination for investors; however, the country is characterised by corruption, a weak legal infrastructure, financial unpredictability and conflicting and negative bureaucratic decision-making.”
So how does this affect the startup scene? It dampens the enthusiasm from foreign VCs, adds an additional risk factor to the success of a company and generally hampers growth.
Also Read: Would I invest in Mark Zuckerberg too?
While Indonesia will naturally benefit from a gigantic population, Vietnam is beginning to solidify itself as the most intriguing startup market amongst Southeast Asia’s developing economies.
As would be expected, there exist challenges of funding, corruption and erratic growth. But the ecosystem is vibrant, young and has a relatively strong support network.
If you are looking to take a risk and jump into a young, underdeveloped but growing ecosystem then look no farther than Vietnam.
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