VietNamNet Bridge – While foreign investment funds complain it is difficult to find suitable start-ups to invest in, Vietnamese businesses say it is very difficult to convince investors because they are too demanding.
Two venture funds Digital Media Partners (DMP) and Monk’s Hill Venture (MHV) still have not found any technology businesses into which they can pump capital.
Tech in Asia in HCM city organised a workshop several days ago where the two investment funds hoped they could find good investment opportunities.
MHV plans to invest $1-5 million, while DMP $0.5-1 million in every company they choose in the first phase of investment. DMP will pump $3 million into every company in the following phases when the companies expand their business.
The representatives of six startups out of the 32 companies calling for the funds’ investment capital were present at the workshop to talk about their projects.
However, the investors did not select any of them because all the candidates could not satisfy their requirements.
Hannah Nguyen from DMP said the fund considers many factors before making investment decisions. Two of the most important factors are business revenue and growth potential.
Regarding revenue, DMP only considers businesses with an annual revenue of $700,000 or more. The formula DMP uses to calculate annual revenue is as follows: four times the revenue of the three latest months.
DMP in the past has paid attention to businesses which have been doing well in the domestic market, and is now willing to reach out to regional markets.
DMP said businesses must have a good management board which can do the management work if directors are absent.
The requirements could not be satisfied by all the startups present at the workshop.
Triip, a tour provider, which was recognized as the best presenter at the workshop, also could not satisfy the requirements of the investment funds because of low revenue. Triip, for now, is concentrating on the domestic market.
Meanwhile, the funds are seeking businesses with plans to develop business in regional markets.
The six projects presented at the workshop were Triip, BabyMe, Cloudjet Solutions, Direct Data, VES – Clean Tech for Life, and Kool Things.
According to Gwendolyn Regina T from Tech In Asia, in order to be selected to have presentations at the workshops, the candidates must satisfy three requirements. They need to have suitable business models and have products with commercial potential. They also need to prove that the products have large markets.
She said most of the 32 candidates are very young, who have business ideas, but have not implemented their ideas.
Analysts earlier this year predicted that Vietnamese startups may see a boom in 2014.
Nguyen Manh Dung from CyberAgent, an investment fund which injects money into projects in Vietnam and Thailand, noted that Vietnam is among the three fastest-growing startup markets in Southeast Asia. The other two are Thailand and Indonesia.
Thanh Mai