New generation of Vietnamese startups begins to rise

International Business News – Startups in Vietnam are gaining attention. The quality of IT talent in Vietnam has improved and the number of internationally experienced entrepreneurs is increasing. In recent years, services and products have been launched from Vietnam to the world. Although venture capital investment in 2022 has dropped to less than half of the previous year’s level, investors remain bullish on Vietnam’s startups.

“Products with global reach have been born. It’s simply a ‘new Vietnam,'” said Chad Aubert, who is a partner at Ho Chi Minh City-based venture capital firm (VC) Mekong Capital.

Blockchain game developer Sky Mavis, for example, pioneered the “Play to Earn” model of making money while playing with its 2018 game Axie Infinity. In developing countries such as the Philippines, there are even users who use Axie Infinity to earn a living. Due to the success of Axie Infinity, many services were developed one after another. The pioneers of the industry were born in Vietnam, not in the United States or China.

The background reason for achieving the sudden progress is the large number of IT engineers in Vietnam, reaching about 500,000 people. The desire of Vietnamese men to become engineers is very strong, and the Hanoi University of Technology and others have sent out many excellent people. PIXTA, the largest operator of image material services in Japan, has set up an AI R&D team in Vietnam.

More and more entrepreneurs are learning the latest technologies overseas and seeing the world beyond Vietnam. Dr. Nguyen Hoa Anh, founder of LiveSpo Global, studied molecular biology at Tohoku University in Japan for more than 10 years. The company exports health products that regulate the body’s environment through microorganisms to more than 20 countries around the world.

Vincent Mourou, the founder of Marou Chocolate, is a Frenchman who came from an advertising agency. His obsession with previously unknown Vietnamese cocoa beans has nurtured them into a chocolate brand sold in over 30 countries and territories. The “international experience” that used to be limited to the former Soviet Union (now Russia) has become rich and varied.

On the other hand, the investment environment in Vietnam is tough at the moment. According to a survey conducted by the National Innovation Center (NIC) and others, investment in startups in 2022 is 56% lower than the previous year, down to $634 million. The number of projects also decreased by nearly 20% from the previous year, to 134. According to CB Insights, global investment from startups decreased by 35%, rippling through Vietnam.

The decline in investment was also augmented by a surge in large investments in 2021. In 2021, there will be five projects with fundraising of over $50 million, such as M_Service, a mobile settlement service “MoMo”, and “Tiki”, a Vietnamese version of Amazon, with a total fundraising of $960 million, accounting for nearly 70% of the total. In 2022, there are only two projects with total fundraising of less than $200 million, which is only one-fifth of the previous year.

Even so, investors remain optimistic. A Japanese investor who has been through several investment funds and is very capable asserts, “Vietnam has a growing economy, expanding domestic demand, and diligent talent. The number of startups in this country will increase.” He entered Hanoi in mid-April and decided to invest in education start-ups.

Katsumata Kanei, former president of the Industrial Innovation Corporation of Japan (INCJ), said with a smile, “There are many acute problems.” He gave a special lecture on the topic of startups at Nipposhi University in Hanoi in April. He said he “sensed a lot of possibilities” from the seriousness of the audience.

After Vietnam’s economic reform policy in 1986, start-ups such as Pham Nhat Vuong of Vingroup and Truong Gia Binh of FPT Group boosted economic growth. More than 30 years after that, a new generation of companies with strong global vision will become the new protagonists of Vietnam’s economy.