Innovation Hotspot: Vietnam Edition
Updated: Oct 9, 2019
Over the next few weeks, I'll be taking a look outside of Singapore, at some of the region's innovation hotspots. First up - Vietnam!
I recently visited Ho Chi Minh city in Vietnam and it had been five years since I last stepped foot in the bustling city. While the city’s landscape is still etched with images of motorbikes and scooters, I was pleasantly surprised at how much had changed. It was hardly the Ho Chi Minh I remembered it to be.
Grab and Uber Bikes were everywhere and almost every person I met or saw had a smartphone. Instead of having to go to a cyber café like I did five years ago to get connected to the internet, the city now has wifi connection at almost every other corner.
Vietnam has been an interesting market in recent years in the startup scene with Samsung, Grab and Lazada building R&D centres in the country.
GROWTH IN VIETNAM
With such a strong history, Vietnam is considered a very young nation- in fact, its actual age is only about 30 years. It’s a country where nearly half the population works in agriculture that aims to escape the middle-income trap by becoming a startup nation. It’s a communist country that tapped capitalism to average 6.4% GDP growth through the 2000s.
Vietnam’s population reached 92.5 million people in 2014, 40 million use the internet, 28 million have active social media accounts and 128 million have mobile connections, according to data on the site Internet Live Stats.
TOP 5 VIETNAM STARTUPS TO WATCH OUT FOR
Foody.vn — This company is the equivalent of Yelp in Vietnam and so far, has raised Series C round. Based in Ho Chi Minh, the site allows users to make online restaurant reservation, delivery as well as online couponing for all f&b outlets across Vietnam.
TicketBox —TicketBox was originally branded as Keewi and has often been compared to Eventbrite or Sistic, providing a huge distribution channels for event organisers. With its seamless payment solutions, the company has enjoyed its fair share of success in the Vietnam startup scene.
Triip- Triip is an app which started as a way for tourists to get a more authentic local experience and has a presence in over 80 countries. It is also a marketplace for individuals to become ‘tour guides’ and showcase tourists the ‘local experience’. This company has enjoyed a healthy amount of success that it has sprouted several imitators in the region.
VNG Corporation — The Unicorn of Vietnam. The country’s largest Internet company is worth over US$1 billion. The company focuses on e-commerce, entertainment and social media and was founded in 2004. It currently employs around 2000 people.
VC Corporation — This e-commerce company which also does M&A currently has 22 portfolio companies ranging from online gaming, classified website, social media platform to digital content services.
While Vietnam seems to present a bright future as a startup nation, it does come with a set of challenges.
There is a lack of local VC ecosystem which means there isn’t a lot of cash going around funding local startups. Many VCs still prefer to set up entities in Singapore or Hong Kong where it is considered less risky than to park their funds in Vietnam. Despite the relative attractiveness of Vietnam with its GDP growth, the country hasn’t set a legal framework yet to ease investors’ concerns.
There are also complicated regulations when it comes to transferring money in and out of Vietnam which isn’t the most ideal scenario for most startups.
Lastly, unlike Singapore there is not so much support and funding from the local government to help and encourage startups.
If you'd like to discuss the startup scene in Vietnam, or elsewhere in the region, drop me an email at firstname.lastname@example.org
Yale Insights: http://insights.som.yale.edu/insights/can-vietnam-become-global-tech-hub