Vietnam-based venture capital (VC) firm ThinkZone Ventures recently launched the $60 million ThinkZone Fund II – the largest local VC fund to date – to aid Series A funding of Vietnamese startups.
Over the years, Vietnam has solidified consistent growth in its startup ecosystem, drawing the attention of top-tier foreign venture capitalists such as Accel Partners, Altos Ventures Management, Goodwater Capital, CyberAgent Capital, AlphaJWC, Monk’s Hill Ventures and Access Ventures, among others.
ThinkZone Ventures provides non-cash investment support through their ThinkZone Accelerator program, which includes a three-month mentoring and coaching program, fundraising support, partnership connection with big corporations, sales and marketing support, and cloud services.
Quan Nguyen, co-founder and CEO of GIMO – a fintech company under ThinkZone’s Batch 03 investment – said ThinkZone doesn’t just throw cash at them. “GIMO receives from ThinkZone a lot of valuable and thorough support from internal management consultation, recruiting high-quality personnel, brand communication, to connection with potential customers.”
Non-financial support, especially from a local investor, is beneficial for startups in expanding their business knowledge as well as their network within the local environment, allowing them to popularize their brands easily and corresponds to financial growth and opportunities to expand.
“Ideas, passion and attitude are the greatest capital of a startup founder. Startup founders who have those three, with support from ThinkZone Fund II, will have great resources to build a long-lasting company,” said ThinkZone Fund II’s Limited partner, co-founder and CEO of IPA Investment Huong Pham.
Other local VCs in Vietnam include VinaCapital Ventures, Do Ventures, and Viet Capital Ventures. VinaCapital is the lead investor in funding round Vietnamese revolutionary real-estate company Homebased raising $30 million.
In 2021, Vietnam’s startup scene accumulated $2.1 billion in VC investments, and the country’s digital economy grew by 30% from 2020, reaching a total of $21 billion.
Alongside VCs, the government plays a huge role in the rise of Vietnam’s startups. Despite the growing VC startup market for Vietnam, foreign investors have dominated the ecosystem, creating setbacks in terms of complicated investment processes, especially licensing and lack of non-financial support.
To address this, the government has been a strong backer of local startups, providing corporate tax exemption for four years and reduced tax payment by 50% for the next nine years. The government has also expressed its interest in 6G development as part of a national strategy to strengthen ICT infrastructure and drive Vietnam’s digital transformation through digital enterprises.
Over the last few years, local startups have been allowed to use free-of-charge government-owned R&D and incubation facilities. Recently, a $1.4 million fund of the MST program SpeedUp has earmarked to support 50 selected startups.
In 2016, the Vietnamese government approved Project 844 – a.k.a. the “Supporting National Innovative Start-up Ecosystem to 2025” Project – which has been successful in accelerating the country’s thriving startup culture. The country also recorded its first ever unicorn, VNG – an online gaming and platform company – in the same year.
More recently, Golden Gate Ventures predicted in their Southeast Asia Startup Ecosystem 2.0 report that Vietnam will emerge as the third largest ecosystem in Southeast Asia in 2022.