VietNamNet Bridge – A lot of venture investment funds have been set up in
Vietnam. However, due to many reasons, the venture funds still cannot make
adventurous investments as per their nature.
Venture funds, who are they?
DFJV, belonging to the joint venture between VinaCapital and the US Draper
Fisher Jurvetson proves to be the best-known venture fund in Vietnam because it
was one of the first funds established in the country. Besides, the Japanese
CyberAgent fund, IDG Ventures Vietnam (IDGVV) are also the well-known names.
IDGVV has been known for the investment portfolio mostly targeting four
important business fields of the Vietnam’s national economy, including
e-commerce infrastructure, information and communication, technology and
IDGVV also considers jumping into other business fields, such as clean energy,
retailing, healthcare and education. It is raising the second fund, about $150
million, to make investment in the above said fields, which is expected to begin
the disbursement by mid 2013.
IDGVV has succeeded with its investment deals, with one or two successful affair
in every business field. Its investments in VC Corp, the owner of Bamboo, CafeF,
and in PeaceSoft, which runs NganLuong.vn and ChoDienTu.vn both have brought
relatively high internal rates of return, above 30 percent. The two companies
are operating in the fields of information – communication and technology trade.
It has also succeeded in entertainment media and e-commerce infrastructure when
injecting money in the two firms which are dominating the domestic market –
VinaGame and DiaDiem JSC, the founder of NhomMua.com.
Nguyen Hong Truong, Deputy President of IDGVV, said the fund makes investments
in the information and communication based fields, because these prove to be
There are two reasons Truong has cited to prove that these are the potential
fields. First, more and more businesses in Vietnam tend to shift to use online
and mobile services in order to optimize their production costs and business
Second, Vietnam now witnesses the strong development of the digital content
services following the development of Internet and mobile devices, especially in
entertainment, music, education, games, mobile content and social
While IDGVV is ready to inject money in the projects it believes have great
potentials, DFJV always keeps cautious about its investment decisions.
Than Trong Phuc, Managing Director of DFJV, said DFJV seeks the businesses which
are on the rise, not the start ups or fledgling businesses with vague business
Facing big challenges
Phuc has admitted that of the operational venture funds in Vietnam, IDGVV is the
only fund which is really “adventurous,” while his DFJV is not. This has been
explained by the fact that the Vietnamese market still does not have enough good
conditions for venture funds to operate successfully.
In the eyes of investors, South East Asia, not including Singapore and
Indonesia, venture funds meet higher risks in their investments, because while
there are good and original ideas, the infrastructure and supporting factors
Therefore, Phuc said, DFJV dares not pour money largely into small investment
deals. He also said that though DFJV also considers pouring money into
e-commerce, it would only be ready to make disbursement in some more years. It
is because high risks still exist in e-commerce development in Vietnam.
E-commerce businesses still cannot build up their prestige among consumers,
while people’s consumption habit shows that Vietnam has yet ready for a real
e-commerce model like eBay or Amazon.