When you think of the startup scene in Southeast Asia, places like Singapore and Indonesia may come to mind, but Vietnam is another tech ecosystem on the rise. With a domestic market of over 95 million people and an economy that has grown 6% on average in the past 10 years, the population is becoming increasingly wealthy. In addition, the talent pool in Vietnam is young and increasingly educated with a growth mentality. Costs of operating are relatively low and there is a high rate of internet penetration—approximately 50 million users in 2017.
It will come as no surprise then that Vietnam’s startups grew 14% in the first quarter of 2017 alone, with 39,580 startups entering the market. A Topica Founder Institute report stated that startup investments in Vietnam were $291 million USD in 2017, a 42% increase from 2016. However, there are still significant hurdles to foreign investment, such as the need for a stronger legal framework to protect venture capitalists and a more streamlined licensing and tax structure. Moreover, although Vietnam has significant technological expertise as an outsourcing hub, the startup scene could benefit from greater business acumen.
In response, Viet Kieu, or Vietnamese people who have studied or worked overseas, have taken on leadership roles, accounting for more than half of the founders out of the 26 firms that 500 Startups Vietnam has funded. Their experience with multinational corporations, understanding of cultural differences, and English proficiency have been instrumental to the success of the Vietnamese startup scene. Still, the country itself is finding ways to support its startups.
The Government and Accelerators Are Fueling Growth
The Vietnamese government is aggressively promoting small enterprises. In 2017, deputy prime minister Vuong Dinh Hue announced the goal of doubling the number of businesses in Vietnam from half a million to one million by 2020. Vietnam Silicon Valley is a government-sponsored initiative to provide legal and financial support to 2,600 startups over the next 10 years. Lastly, the government has relaxed visa programmes for Viet Kieu, allowed them to regain citizenship under specific conditions, and exempted them from certain foreign investment requirements.
Tech accelerators are also pushing the growth in startups. Topica Founder Institute is a 14-week programme with an impressive track record of 60 graduate startups, $20 million USD in funds raised, and $100 million USD in valuation since 2011. VIISA, the Vietnam Innovative Startup Accelerator, is an accelerator programme and seed stage fund of $6 million USD. Launched in 2013, Vietnam Silicon Valley is a government-sponsored bootcamp that includes a $20,000 USD investment and access to 60 mentors and 52 startup alumni. Lastly, TechFest is an annual event showcase of over 200 startups, hosted by the Ministry of Science and Technology and broadcast over live television.
With major resources behind them and a positive climate for tech businesses, here are four Vietnamese startups showing immense promise.
Based out of Hanoi, Logivan is a web-based platform that connects businesses with a fleet of over 5,000 trucks, which are constantly tracked and optimised. The logistics industry makes up approximately one quarter of Vietnam’s GDP, and in 2016 logistics firms earned approximately $8.5 billion USD in revenue, owing in part to the country’s underdeveloped transport infrastructure which causes prices to rise. Logivan plans to disrupt and digitise this industry, centralise and automate logistics, increase capacity, and improve supply chain efficiency.
In November 2017, the up-and-comer won “Best Startup” at RISE Pitch Battle, the largest technology conference in Asia, and earned a sponsorship from Uber Chief Technology Officer, Thuan Pham. In August 2018, Ethos Partners, Insignia Ventures Partners, and VinaCapital Ventures funded a $1.75 million USD Series A round to expand Logivan’s logistics services in four major economic hubs across Vietnam. The startup previously received a $600,000 investment in March 2018 from Insignia, which the company matched during its time at the Topica Founder Institute accelerator programme.
The company was founded by Linh Pham, a former Goldman Sachs technology analyst and Cambridge University graduate who previously founded Snappetite, a time-dependent platform for deals. Pham’s vision is to reduce prices, offer transparency, and provide real-time tracking for shippers and cargo owners.
Founded in 2012 in Ho Chi Minh City, Foody is a gourmet media company and user-submitted review platform for any location food-related, including restaurants, bars, cafes, bars, bakeries, and resorts. The company boasts hundreds of thousands of locations, images, and comments.
One of Vietnam’s most successful startups, Foody has received numerous rounds of funding by an array of investors. Seed and Series A funding was provided by Japanese VC firm, Cyberagent Ventures, and Pix Vine Capital. In 2017, Singapore-based consumer internet group, Sea Limited, acquired an 82% controlling interest in the company for approximately $64 million USD, the largest investment of the year. SEA, one of Southeast Asia’s first unicorns, is valued at about $3.75 billion USD and previously funded a Series B round in 2015, which was followed by a Series C investment by Tiger Global Management less than a month later.
Like many other startup leaders in Vietnam, Foody’s founder and CEO, Dang Hoang Minh, spent time abroad. Born in Vietnam, he went to Australia for university and studied Software Engineering and Information Systems before returning to his home country. Foody has expansion plans in Indonesia and Thailand.
Based in Ho Chi Minh City, Ami is capitalising on Vietnam’s booming real estate market by developing a suite of software and hardware products that will help owners and property managers connect with residents and digitise their information. Based upon blockchain, internet of things, and artificial intelligence technologies, the company’s products include:
- Ami A Biz, a supply chain logistics to verify authenticity in goods and ownership
- Ami Citizen, a digital record of individuals used by landlords and businesses
- Ami University, a data management tool for universities to track students and professors
- Ami Building, a condominium management platform
- Ami Electricity, a web-based metre tool
- Ami Fingerprint, an online storage space for fingerprints
In the past couple of years, the startup has had an incredible growth trajectory. It won the top prize at the 2017 TechFest competition, and subsequently received $9 million in funding from the Vietnamese real estate corporation, Binh Minh Group. Between October 2017 and April 2018, the number of tenants in its property management product tripled. With approximately 1,500 rooms in its marketplace, the company’s target for 2019 is 100,000 rooms across the entire country. Looking forward, Ami plans to create a digital community between Vietnam’s citizens and their residences, schools, and businesses.
Established in March 2010 as an online book dealer, Tiki is a business-to-consumer e-commerce company and the fastest-growing retail company in Vietnam. With more than 300,000 products in 12 categories, the company posted 2016 revenue of approximately $2.7 million USD and a loss of about $7.8 million USD after high operational expenditures needed to entrench itself in the consumer marketplace.
Despite its losses, Tiki has been an attractive investment, especially as the e-commerce sector grew by more than 25 percent in 2017. The startup received initial funding in 2013 from Seedcom, CyberAgent Venture, and Sumitomo Corporation. In 2016, the startup was valued at $45 million and subsequently received $17 million USD for a 38% stake by VNG Corporation, which specialises in digital content, online entertainment, social networking, and e-commerce. Most recently, Chinese megaretailer JD.com Inc. and South Korea’s STIC Investment funded a Series C round of $54 million USD to help consolidate Tiki’s market presence.