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Vietnam part of attractive Southeast Asian start-up scene

By Tung Ha   July 15, 2018 | 06:39 pm PT
Vietnam part of attractive Southeast Asian start-up scene
Vietnam is yet to have an startup that values more than $1 billion. Photo by VnExpress
Investor says country highly promising even at nascent stage.

The trend of investing in Southeast Asia start-ups gained momentum in 2016-17, including in Vietnam, though the country has yet to get its “unicorn,” or a privately held start-up with a valuation of $1 billion or more.

“I think one of the reasons start-ups in Southeast Asia get such attention from foreign investors is the 'unicorn' companies, which attract talent from other countries to the region,” KK Fund’s general partner, Kuan Hsu, said.

“In contrast to Vietnam and Malaysia, which are yet to have any unicorns, Indonesia already has four companies in this category.”

Vietnamese start-ups received $61.5 million worth of investments last year, Tech in Asia reported. But Topica Founder Institute (TFI) said it is much higher than that, with $300 million invested in 92 different deals, and potentially even higher.

Hsu said that Vietnam and Indonesia are favored destinations for anyone looking to start companies because they have big populations on top of large numbers of young people, and thus have huge consumption potential.

Nikhil Kapur, head of South Asia, GREE Ventures, agreed with that view, saying Vietnam shows many promising signs of becoming a start-up nation though it is still at an early stage.

“We will evaluate annually to determine Vietnam's potential growth for start-ups. But at the moment, we need more time to carefully study the market because Vietnam is different from other countries in the region. Some businesses are on the right path to becoming a successful company.”

Research shows there is a new start-up for every 57,982 people in Vietnam. According to the website Worldometers, the country had roughly 1,664 start-ups.

But Hsu said the nationality of founders does not matter when counting the number of start-ups in a country, only where the businesses are registered.

For instance, Loi Luu, a Vietnamese entrepreneur and the CEO of Kyber Network, registered the business' headquarters in Singapore. As a result, this successful company, listed among the 50 most successful start-ups in Southeast Asia in terms of attracting investments, is considered Singaporean.

Now e-commerce is the most popular sector with foreign investors.

The Vietnam E-commerce Association said the country’s e-commerce market grew by 25 percent last year and this rate is expected to continue through 2020.

Last year the sector saw 21 deals worth $83 million, the highest of all sectors.

It was followed by culinary technology, financial technology, communications, transportation, and online travel.

The start-up to attract the highest funding was Foody, which received $198 million from Sea Group for an 82 percent stake.

Sea Group also bought two unnamed companies in logistics and financial technology for $64 million and $50 million.

Rounding off the top six were Tiki ($54 million from Inc), an unnamed company ($20 million from TNB Ventures) and Vntrip ($10 million from Hendale Capital).

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