Foreign investors deeply impressed with Vietnam startup scene

"It's Vietnam's turn to have new unicorns," South Korean angel investor Lee Jae-Woong said at the recent 2019 Forbes Vietnam Tech Summit, referring to privately held startup companies that are valued at over $1 billion. 

Lee, one of three founders of Daum Communications, a South Korean web portal service, said Vietnam has the right conditions to produce these highly successful ventures, the same that enabled South Korea to produce them around 20 years ago.

South Korea industrialized in the 1960s, developed information technology in the 2000s, and is now entering the fourth industrial revolution, he said. 

"Vietnam currently has all three conditions, which is perfect for breakthrough growth. The country also has the required infrastructure, good labor force, and government support." 

Last year Vietnamese startups attracted 92 investment deals totaling $889 million, three times the value in 2017, according to Hanoi-based startup accelerator Topica Founder Institute.

The five most profitable fields for startups were fin-tech, e-commerce, traveltech, logistics, and edtech. Fintech returned to the top spot in terms of investment in 2018 with eight deals totaling $117 million.

While many are optimistic that Vietnam’s unicorns will come from the fin-tech sector, the top startups in this segment say they are not too serious about numbers and titles.

Nguyen Manh Tuong, CEO of e-wallet and payment application MoMo, said, for instance: "We haven’t thought about going public yet. When we started, it wasn’t about ‘creating a unicorn’ but realizing the dream of mobile payment. We might have not made it for 10 years if we had." 

Momo was included in KPMG’s Fintech 100 list last year comprising the 100 most innovative fin-tech companies worldwide.

Tran Thanh Nam, founder of Moca, another mobile payment app, also said the main aim of his company was not to get rich but usher in mobile payment in Vietnam. 

Moca recently signed a partnership with Grab, hoping to make the app accessible to millions of people. 

Some foreign investors are impressed with the efficiency of Vietnamese startups, some of which are even more competitive than foreign startups despite having much less resources. 

"I have just seen a Vietnamese company whose resources are equal to one-twentieth of foreign competitors’ take the lead in the market," Bert Kwan, CEO of Northstar Group, a leading private equity firm in Southeast Asia, said.

He lauded the investment environment, predicting that in two years there would be Vietnamese startups with overseas IPOs.