Exploring Vietnam’s Startup Ecosystem and Investment Landscape

An Overview of Vietnam’s Startup Scene

Vietnam’s startup ecosystem is burgeoning, drawing attention both domestically and internationally. Mr. Jin Young Kim, Partner of VIVACE Consulting & Accelerator, emphasizes that there is an increasing trend of Vietnamese startups securing funding from outside traditional venture capital sources. In fact, most venture capital funding flowing into Vietnam is from foreign investors, highlighting a noticeable gap in local venture capital sources.

The Rise of Local Venture Capital

Prominent local venture capital firms such as Do Ventures and ThinkZone Ventures are making strides to fill this gap. The Vietnamese government has actively encouraged the establishment of domestic VC firms, a move that may see a flourishing number of local players emerging over the next several years. Mr. Kim predicts that in three to four years, local VCs will robustly compete with foreign funds, making the investment landscape more balanced and competitive.

Initiatives by The Invention Lab

Since 2019, The Invention Lab has been instrumental in fostering business collaborations, particularly between South Korean companies and Vietnamese markets. With over 50 South Korean companies establishing subsidiaries in Hanoi and Ho Chi Minh City, the impact is evident. Successful startups such as OKXE.VN and Go2Joy have emerged from this initiative, driven by South Korean founders but heavily supported by Vietnamese talent in key positions like CTOs and COOs.

A signature initiative, the “Founder Meet the Founders” program, aims to connect South Korean and Vietnamese entrepreneurs. This fosters an environment where the two parties can collaborate to launch startups in both Vietnam and South Korea, benefiting from each other’s strengths.

Attracting South Korean Investors

Vietnam boasts a wealth of talent, particularly among its youth, who the South Korean startup ecosystem often struggles to attract. As Mr. Kim points out, the abundance of skilled individuals in IT and other fields can be a magnet for South Korean investors looking to capitalize on this pool of talent. He stresses that these startups should leverage their strengths and present compelling propositions to attract more investment from South Korea.

The Challenge of Exits in Vietnam’s Ecosystem

A significant challenge facing Vietnam’s startup ecosystem is the exit strategy for startups, as noted by Mr. Byung Won Choi, also from VIVACE Consulting & Accelerator. Unlike established markets with tailored platforms like NASDAQ for startup exits, Vietnam lacks an equivalent. For a vibrant startup ecosystem, there must be an environment conducive to initial public offerings (IPOs) on local stock markets.

The Importance of Fintech Collaboration

Fintech emerges as a vital area where mutual benefits can be realized, as underscored by Mr. Sang Cheol Jeong, President of VIVACE Consulting & Accelerator. Vietnam’s rapid digitalization, youthful population, and rising disposable incomes create fertile ground for mobile technology and fintech solutions.

Mr. Jeong envisions that collaboration between Vietnamese private financial sectors and established South Korean fintech startups could accelerate the adoption of advanced financial technologies. As the economy grows, there will be increasing demand for innovative financial services, making this partnership essential.

Future Prospects in Vietnam’s Financial Landscape

The Vietnamese banking sector remains the primary provider of financial services. However, as the economy evolves, there’s a visible shift towards capital markets, securities, and insurance. This shift underscores the importance of developing tailored fintech solutions to address the increasing complexity and demands of market-oriented financial services.

VIVACE’s Commitment to Growth

Looking ahead, VIVACE seeks to bolster its advisory services tailored for Vietnamese companies in the fields of startups, financial services, and technology. Acting as a bridge, VIVACE aims to connect these businesses with potential partners and investors from South Korea, enhancing collaborative efforts that are vital for growth and innovation in the Vietnamese market.

As both VIVACE and The Invention Lab sharpen their focus on integrating South Korean expertise with Vietnamese innovation, the landscape promises to evolve into an exciting hub for startups ready to harness the vast potential within Vietnam and beyond.