There’s more to Vietnam’s startup scene than meets the eye

A Vietnamese magazine called Nhip Cau Dau Tu recently published an article titled Startups: Still No Luck. It outlined how startups in Vietnam today have stagnated behind the rise of VNG. One of the central arguments is that VNG is ostensibly the biggest and only tech success from Vietnam. The article interviews some of Vietnam’s biggest tech titans including Le Hong Minh, co-founder and current CEO of VNG; Bryan Pelz, co-founder and former CEO of VNG; Do Hoai Nam, co-founder of Emotiv and InAir SeeSpace; and Henry Nguyen, partner at IDG Ventures Vietnam. But the article fails to get into the details of Vietnam’s actual startup scene.

With all due respect to the four great men listed above and the journalist behind the article, it’s hard to argue that they represent a comprehensive view on the startup scene in Vietnam. Le is CEO of Vietnam’s top consumer internet company. I would ask him about how to do startup in Vietnam, not about how startups are performing in Vietnam. Bryan has been working on his own startups that are more focused on the global market, not targeted at Vietnam. Nam, although many of his projects involve Vietnamese people, is like Bryan in that his focus has long been on the global market with both his companies. And finally, Henry, his biggest focus at the moment is bringing McDonald’s to Vietnam. In other words, although these men are certainly a part of the startup ecosystem, they represent perspectives that roar from the top.

So for your reading pleasure, I would like to take you through the organic trenches of Vietnam’s startups today that indicate that VNG is not the only success to come out of Vietnam and making such an assumption completely ignores a burgeoning startup market.

Fair comment on VNG

Now, before I get into the nitty gritty, I have to say that VNG is indeed one of the most promising and powerful companies in Vietnam’s tech scene. It recently hit a huge milestone of 10 million users for its chat app, Zalo, defeating larger rivals like Line and KakaoTalk on home turf. No other company in Southeast Asia has been able to pull this off. And in 2012, it made $90 million in revenue. This far outweighs any other startups near it. But it’s worth noting that it was founded in 2004. That was ten years ago. VNG is also currently in a major transition into mobile, a totally new area for them. Although its vast revenues represent powerful reserves to invest in new products and cultivate its platforms, building a strong business on mobile is still an unclear area.

Also, VNG is not the only big company that survived and succeeded from the early 2000’s. VC Corp (online media and ads), Vat Gia (ecommerce), and The Gioi Di Dong (omnichannel retail) are also successful, large tech companies.

Amazing startups in the new wave

Today, we have seen the rise of startups in the late 2000’s and the past few years. The rise of the daily deals sites – like Nhom Mua (at one time valued at over $60 million), Hotdeal (receives 8,000 deliveries per day), CungMua (now has over two million accounts), and MuaChung (operates under VC Corp) – is a profound indication that new startups can enter spaces that VNG cannot. All of these were founded around the same time: 2010. They slowly paved the way for Vietnamese ecommerce to rise. At the same time, a viable B2C ecommerce site has risen since 2010 in the form of Tiki.vn. It started out with books, thus competing with Vinabook (founded by the same person as Hotdeal). Rumor has it that Tiki.vn is valued in excess of US$10 million. Ecommerce is not only a land dominated by the big-hitters like Rocket Internet or Vat Gia.

(See: Forget Vietnam’s Lazada and Zalora, Hotdeal.vn makes 10,000 deliveries per day)And that’s just in ecommerce. There’s a promising handful of startups that are able to compete on the global stage – an area that VNG has not focused on and also struggled to succeed in. The Prima Circa team was officially founded in 2011, although it started working on its apps in 2010. This team created Notes Plus, a mobile note taking app that sells for $10 and has over six million downloads. Its latest app, INKredible, received over one million downloads in one month. Those downloads were worldwide. Not A Basement, an app studio founded in 2008, has repeatedly topped the App Store, even getting Apple Editor’s Choice, with its Fuzel photo collage app. Divmob, a mobile gaming studio, has achieved over 20 million downloads for its apps globally. Greengar, with its flagship collaborative app Whiteboard, has got over 15 million downloads worldwide. KMS, an outsourcing outfit, recently refocused some of its technical expertise on QA Symphony, an enterprise-ready testing solution. And do I really even have to mention Flappy Bird? By far, it is one of the biggest game successes out of Vietnam this year that’s not from a huge, lumbering company, but made by one guy hidden up in Vietnam’s capital. It’s interesting to note that these startups do not have the marketing budget that VNG has at its disposal for Zalo.

One startup looks set to challenge VNG – let battle commence

And the innovation keeps coming