Capital Keeps Flowing Into Startups

Vietnamese startups have been told that they now have opportunities to access capital from South Korean investors.

Youn Jang Park from NIPA, the South Korean national IT promotion agency, has confirmed that K-Start-up Grand Challenge 2018 Program has been activated, ‘a great opportunity’ for startups.

Mai Duy Quang, deputy chair of the Vietnam Software Association (VINASA), said it is expected that the money poured into startups this year will be ‘extremely high’, partially thanks to big deals such as Tiki and Foody.

Quang said the solid sci-tech foundation, young manpower and a new market are all factors catching investors’ attention.

“A lot of corporations and investment funds are seeking potential startups all over the world,” Quang said, adding that Vinasa every week receives 2-3 delegations of investors coming and seeking startups to invest in. In previous years, only 2-3 delegations of investors came a month.

Capital flow unstable

Vietnam is listed among the countries with high potential in startups, especially technology startups. In 2017, the investment capital injected into 92 startups in Vietnam reached $291 million, an increase of 42 percent compared with 2016 ($205 million). The figure was $137 million in 2015.

Vietnam’s growth rate in startups is relatively high. There were only 28 investment deals in 2014, while the figure soared to 67 in 2015. Sixty deals were reported in 2016 and 92 in 2017.

An analyst commented that Vietnam’s startups can receive capital even at ‘sensitive’ moments, when so many startups in the world ‘died’ because of the sharp fall in the number of investment deals in 2016 and 2017.

Quang affirmed that Vietnam is a ‘big name’ in South East Asia in terms of startups, citing Thailand’s 2017 report as showing that the money invested in Thai startups was just equal to half of the amount of capital Vietnamese startups could call for in that year.

However, Quang admitted that the capital flow into startups is unstable. At some moments, the capital flowing to Vietnam was so little that it was impossible to ‘measure’ the amount. 

In 2011, there were only over 10 small-scale investment. Vietnam could only begin ‘measure’ the amount of money poured into startups in 2014-2015.

Vietnamese startups, however, have been developing more slowly than in some other countries. 

Some startups have successfully called for capital, but most of the investment deals were small, around $100 million. VNG is the only startup which could call for $1 billion.

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Mai Thanh