Over the past two years, Vietnam’s internet and mobile market has caught
the attention of both major domestic and international investors, said
the Vietnam Investment Review.
Many venture capital firms are willing to invest in start-ups and new ideas, the newspaper said
According
to vice president of IDG Venture Vietnam (IDGVV) Nguyen Hong Truong,
the start-up wave in Vietnam is bigger than most countries in ASEAN,
especially in the internet and mobile sector. With diverse products and
services, many local companies have already even expanded into overseas
markets, Truong added.
Currently, IDGVV is funding 40 companies
in the online and mobile service, technology, education, media and
entertainment fields. With the dynamic growth of mobile and internet
users, firms funded over the past two years have reached an annual
growth rate of 30 percent.
“IDG will continue investing in firms with potential, however our requirements will be higher,” Truong noted.
Compared
to developed countries, Vietnam’s start-ups are facing with capital
shortage.Truong however believes that investment flows into ASEAN,
particularly by Japan and Korea, is an opportunity for Vietnam’s
internet and mobile start-ups to blossom.
Online marketing and
e-commerce are two promising areas. The increasing number of users is
likely to encourage electronics entertainment firms to supply more
internet and mobile services, serving the marketing purposes of many
companies.
IDGVV is planning to expand the market through MA
by finding international strategic partners for its investee firms, and
by expanding leading internet firms’ operations to the regional scale.
In
the early stage Vietnam’s start-up trend, IDGVV invested into a wide
range of firms, some of which have become very successful such as VNG
JSC, VC Corp JSC, and Vat Gia JSC.
Not all venture capital firms
have been as successful as IDGVV. General director of DFJV, a fund under
VinaCapital, Than Trong Phuc said that after seven years operating in
Vietnam, DFJV has invested in only 10 companies.
Last year DFJV withdrew from VON JSC, which owns two job finding websites named kiemviec.com and hrvietnam.com.
According
to Phuc, in the early stage there were assistance organisations helping
to strengthen start-ups before venture capital firms jumped in. But now
these venture capitalists have to compete with not only each other, but
also a rising number of individual investors, while not as many
investee companies are showing potential.
Phuc admitted that even
though American, European and Asian investors are targeting Vietnam’s
market, funding for DFJV has not been easy over recent years.
Currently DFJV is assisting firms with a high growth rate, as its goal is to triple its capital investment.
“DFJV
will invest in either a technology or entertainment firm this year,”
Phuc said. In the near future, e-commerce, entertainment and
communication firms will be at the top of their list, he added.
The
word on the street is that IDGVV is the most risk-loving, capital-loose
venture capitalist in the market, but it has yet to publish an updated
list of new portfolio companies since its last report several years ago.
When
it first came to Vietnam, IDGVV regularly posted its list of
investments. But once the market became more stable, they only post new
additions at the investee firms’ request, Truong explained.
Most
companies that are funded by venture capital firms are stable and
capable of achieving high growth rates. They admit that they can hardly
survive without the fund.
One example worth mentioning is Appota,
the first mobile content distribution platform in Vietnam. With their
name in the top-nine digital content start-ups in Southeast Asia, Appota
is now valued in the millions of dollars.
Appota’s General
Director Do Tuan Anh said the firm is being financed via Singaporean and
Japanese venture funds. Apart from capital, they are bringing in other
support such as networks and long-term consultancy, he added.-VNA