In 2004, a company named Vinagame was started by five co-founders with a mission to deliver relevant software to Vietnamese gamers. Today, Vinagame (rebranded as VNG in 2010) has an estimated valuation of at least US$1 billion, making it Vietnam’s only home-grown unicorn.
While VNG focussed mostly on the local market during its rise to success by offering Vietnamese consumers services, such as Zalo (a chat app) and Zing (an online portal) in addition to its game selections, the next major Vietnamese success story might squarely target regional or international consumers on the road to becoming a unicorn.
Since joining the World Trade Organization (WTO) in 2007, Vietnam has progressively become more integrated with global markets now, more than ever before, due to numerous pending and active Free Trade Agreements (FTAs) and a rising middle class. Increasingly, Vietnamese startups have a desire to go abroad and there is reciprocal foreign investor and mentor interest in the country to benefit from.
Already, Vietnamese entrepreneurs have begun building a global network to tap into for mentorship, funding, and soft-landing opportunities into other markets. Chile, Morocco, the US, Thailand and Finland have the distinction of being some of the first countries, where Vietnamese entrepreneurs and startups have visited in order to participate in an event, accelerator, or roadshow.
Besides these countries, Vietnamese startups have also travelled to places such as Malaysia, Mexico, the Philippines, Indonesia, Hong Kong, Taiwan, and Ireland to compete or participate in startup events, such as the Global Entrepreneurship Summit in Morocco, Startup Nations Summit in Korea, and TechCrunch’s Disrupt in San Francisco.
In November 2015, Vietnamese startups were present at two major conferences in Europe and Asia: SLUSH in Helsinki (Finland) on November 11 and 12, as well as e27’s own Echelon in Bangkok (Thailand) on November 26 and 27.
The Vietnamese delegation to SLUSH comprised startups such as TraceVerified, a food security service; Cobri, an IoT developer behind Hackanoi, a hacker space in Hanoi; and Abivin, a data analytics solution provider. The delegation to Echelon Thailand included TicketBox, an online ticketing platform; Topica, an online education platform; and Firelight.TV, a media-sharing platform.
A separate Vietnamese government delegation, comprising members from the Ministry of Finance (MOF), Ministry of Planning and Investment (MPI), and the Ministry of Science and Technology (MOST), also participated in SLUSH but spent most of their time meeting with their Finnish counterparts during the event week in Helsinki.
Riku Mäkelä, Senior Innovation Expert of Vietnam-Finland Innovation Partnership Program (IPP), who was present at those meetings, stated: “I had the privilege to join the representatives (sic) of Vietnamese ministries when they visited the SLUSH event and key stakeholders of the Finnish innovation system. The Finnish hosts were positively surprised by how well the delegation was prepared and how open they were for finding concrete actions to move fast in the development of bi-lateral cooperation between Finland and Vietnam, in areas that are related to research, innovation and entrepreneurship.”
Growing international interest in Vietnam
For those who have travelled to Vietnam or have invested in Vietnamese startups, the raw talent and potential for opportunities can be surprising or enchanting at first, and eventually inspiring. For example, in a TEDxLausanne talk earlier this year, Seedstars World Co-founder Alisée De Tonnac stated, “I have met some of the most sophisticated companies in Vietnam that, if I hadn’t told you the founder was from Vietnam, you would have accredited this company to Silicon Valley.”
Last month, Beeketing which provides automated marketing solutions for SMBs was invited to the Seedstars Summit (which is organised by Seedstars World) in March 2016, making it another Vietnamese startup to have the opportunity to go to Switzerland to attend the Emerging Market Entrepreneurship Forum. The Vietnamese startup that went to Seedstars Summit this year was Triip.me, a local tour guide marketplace.
Seedspace, which is closely linked to Seedstars World, is currently looking to open a co-working space in Vietnam, with potential locations in Hanoi or Ho Chi Minh City via a local partner. One of the key differentiating features of a future Seedspace in Vietnam is that it would have a co-living element in addition to the standard co-working, events facilitation, and catering offerings.
According to Stéphane Journot, Managing Director of Seedspace, “Seedspace is a collaborative workspace, meaning that beyond a co-working and events dynamic, the spaces also include co-living as well as a global network established now in more than 60 countries, thanks to Seedstars World. So far, Vietnam seems to be a place where learning and education is a true need. And the main reason why we want to establish a space there during our first expansion year is that we’ve been following a great startup ecosystem in the area for three years now.”
A future Seedspace in Vietnam would aim to be a physical hub where anyone could take an idea and turn it into a working product or service by developing a proper value proposition, providing access to capital and lowering the cost of developing a prototype.
Another Swiss organisation, the Swiss Founders Fund, recently invested in Taembe, a leading baby supply online retailer. According to Patrick Degen, Partner at the Swiss Founders Fund (Switzerland), “We see quick improvement of infrastructure and the startup ecosystem in Vietnam. There is a lot of skilled technical talent, entrepreneurship is part of the Vietnamese culture, there are more and more co-working spaces available, and running an ambitious tech startup is becoming a real alternative to young professionals.”
However, Degen also says, “In order for Vietnam to become an important regional player in Southeast Asia’s tech ecosystem, legislation needs to follow and private VC funds need to settle.” Thus, it will be interesting to see which investors will enter Vietnam’s market next in order to gain a better understanding of local market conditions.
Local and regional involvement
Closer to Vietnam, VC firms such as Singapore-based Golden Gate Ventures have turned their attention to startups in Vietnam by investing in companies such as Appota, a third-party app marketplace and distribution platform, and more recently, Lozi, a food ordering startup.
Jeffrey Paine, Managing Partner at Golden Gate Ventures, sees the unique strengths of Vietnamese startups being their “creativity, engineering and able to think out of the box to survive.” However, he also believes that local government should support the startup community by “provid[ing] incentives for risk investors to make early investments into high-growth technology companies.” Furthermore, it is important that there are “regulatory changes to make direct investment easier, [including] company and incorporation laws.”
Regarding other Singapore-based organisations such as startup incubator JFDI and accelerator muru-D, Vietnamese startups including Wiindi (a social discovery e-commerce platform), Taembe, and Userscout (a web-based platform that unites researchers and study participants) have entered JFDI’s programme. Gcall, which enables web-calling for online retailers, is currently among muru-D’s current batch of startups. So, Vietnamese startups are making headway into the ‘Silicon Valley’ of Asia.
According to Paine, Vietnamese startups are ready to go global, “but they need more time and exposure if they are totally local. To shortcut it, enlist more mentors and friends who have ‘been there, done that.’” When it comes to going abroad, he suggests that Vietnamese entrepreneurs “just be relaxed and make friends. Overall, try to improve your own English language skills, at least [on a] conversational [level].”
For an entrepreneur like Tom Tran, Co-founder and Chief Facilitator of Cobri: “The biggest key for Vietnamese tech startups to succeed globally is to solve next-generation problems and to challenge your engineers. My bold plan to contribute to the Hanoi ecosystem would be to help to build a strong AI competence centre with robotics parts manufacturing and IoT (Internet of Things) design expertise. So at Cobri, we are focussing on IoT prototyping. For example, we will develop smart agriculture solutions for the growing global needs of food quality and safety and we are going to pilot the first projects in Vietnam.”
Cobri — which is comprised of American, Argentinian, Moroccan, German, and Vietnamese talent — was based in Toong’s Trang Thi location in Hanoi and has grand plans for its future since coming back from SLUSH. This month, it will move to Toong’s new Tay Ho location on To Ngoc Van and as Tran explains, “It is also here in Hanoi where we are building our factory, but we are also planning to open offices in Buenos Aires and San Francisco in 2016.”
Changing minds and policies
So what’s the value in Vietnamese startups going abroad? For one, going to strategic events builds up Vietnam’s profile globally. It allows Vietnamese teams to take a look and see what is out there on the cutting-edge international market and maybe, even gain a serendipitous ally or deliver an off-the-cuff demo to a potential stakeholder.
However, it may be necessary to change the mindset of Vietnamese entrepreneurs and policymakers back home first before trying to alter the international perception of Vietnam and promoting Vietnamese startups abroad. As Degen and Paine mentioned, the private sector can’t develop Vietnam’s enterprise ecosystem alone, the public sector plays a critical role in developing a foundation for the private sector to build upon.
2016 is a particularly opportune time for Vietnam’s policy makers to develop and promote national legislation, frameworks and incentives to foster local and foreign entrepreneurship in Vietnam, incentivise investments in Vietnamese startups, and enable technology and innovation to drive the Vietnamese economy forward after the upcoming 12th National Party Congress. Any meaningful and committed initiative will send a clear signal to foreign entrepreneurs, investors and developers that Vietnam is indeed open for business and serious about entrepreneurship at the startup level in addition to the multi-national corporation (MNC) interest shown by Hanoi.
What the future holds
In the meantime, Vietnamese entrepreneurs and startups will continue to build bridges into other markets and some might even enroll accelerators in unexpected countries in order to gain international experience and exposure to continually improve. While these Vietnamese entrepreneurs and startups continue to go abroad, more local and international events such as hackathons, demo days and conferences will be held across Vietnam’s three major cities of Hanoi, Danang and Ho Chi Minh City, with more foreign experts coming to demonstrate and deliver global best practices.
As Degen says, “Events like Founders Drinks, Seedstars World and other tech meetups help to educate and inspire local talent, as well as build up valuable connections necessary to create success.” Indeed, an effective tool for success in creating awareness of the Vietnam brand might be something as simple as one of Vietnam’s most visible brands: the nón lá.
The nón lá, or traditional conical hat, could be an emerging sign of Vietnamese startups on the global scene; at the SLUSH event in Helsinki, startup TraceVerified brought dozens of the cultural icon with company logos on them to hand out from its shared booth. It seemed to be a sound strategy to promote the startup as the hats were a hit at the SLUSH after party. (Perhaps a “high-tech” nón lá version 2.0 will be available for future conference attendees.)
So if you plan to attend a startup event next year, don’t be surprised if you happen to see some conical leaf hats at Web Summit, SLUSH, RISE, or maybe even at an Echelon Danang (in central Vietnam) event in the near future. And it might happen more quickly than one might think because as Degen states, “The market is in steep incline to the next level, and we are keen to be part of this journey.”
Nón lá included, of course.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, please send us an email at writers[at]e27[dot]co