Vietnam has one of the best track records in making growth more inclusive and sustainable towards all segments of the society and population.
NOTE: It’s been a while since I wrote on my Medium page. I went through a career switch, going from the startup side to the VC side, through my work at VIISA.
While it’s been challenging, the work allowed me to contribute substantially to the Vietnamese startup ecosystem building journey, meet plenty of new friends and like-minded partners/mentors, and pick up a number of great knowledge gems along the way.
This article, therefore, will be the first of a series of summaries and sharing that I will be posting moving forward.
Just to clarify, the Investopedia definition of venture capital is as follows.
Venture capital is financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. Venture capital, generally, comes from well-off investors, investment banks and any other financial institutions. However, it does not always take just a monetary form; it can be provided in the form of technical or managerial expertise.
Since opening up again to the global market in the early 1990s, starting with the Reformation movement kickstarted by the government, Vietnam has experienced a steady economic growth. Despite certain periods of economic struggles due to global depressions, Vietnam has enjoyed what World Economic Forum (WEF) recently dubbed “economic miracle”.
Viet Nam’s per capita GDP has increased tenfold over the past 30 years (source: Google, World Bank)
This impressive growth, while quickly transforming the economy and society, also comes with sustainability. According to WEF’s Inclusive Development Index, Vietnam has one of the best track records in making growth more inclusive and sustainable towards all segments of the society and population, esp. female business owners.
The government also pours plenty of public investments into building infrastructures and human resources. Through hefty improvements in education, especially at primary level, Vietnam has produced a numerous generation of IT and software engineers, enough for international corporations like Intel, Bosch, Samsung, etc to set up R&D centers here while also nurturing the development of local IT companies such as FPT, VNG, CMC, and so on.
The capital injection into local infrastructure also exhibits successful returns, with Vietnam becoming one of the most mobile-friendly countries in APAC, with over 70 unique mobile users out of a population of 96 million, according to a recent WeAreSocial report.
These conditions, combined together, have created a favorable environment for the outspringing of startup companies. Per a research by Dezan Shira & Associates, between 2010 and 2017, the number of invested startups had increased from 10 to 92, with 61 percent of the projects receiving investments of less than US$1 million.
The local investors have also become more VC-friendly: Out of the 92 deals in 2017, foreign investors engaged in only 28 deals, while local investors accounted for a surprising number of 64 deals.
This article, then, will attempt to account for the development of Venture Capital industry in Vietnam over the years, comprehend the current blossoming of VCs in Vietnam both in fund and deal sizes, and offer a prediction of the near-future growth.
According to a report on Yahoo