A comprehensive look at Vietnam’s startup ecosystem in 2014: 6 investors, 10 incubators, and lots more

Vietnam’s ecosystem has been growing especially fast in the last two years. But for outsiders, despite an increased amount of tech articles about Vietnam in English, it still remains an unknown entity. In Silicon Valley, big companies like Google and Facebook and accelerators like Y Combinator and 500 Startups bring in startup people from across the globe to visit the Valley. The gravitational pull of these big names makes the Valley that much more accessible. For Vietnam, finding the right people and organizations to check out can be quite a task.

(See: Why Vietnam is proud of Flappy Bird)So, for your viewing pleasure, let’s take an in-depth look at the rising ecosystem that has spurned incubators, accelerators, hackathons, events, and support organizations.

At the meetup with Palantir founder, Joe Lonsdale, organized by FBNC and 5Desire. More than 200 people in attendance.

Where the ecosystem is today

Unlike some of its neighbors, Vietnam benefits from a first wave of startups that started almost ten years ago. This phase, which contains large tech companies like VNG, VC Corp, and Vat Gia (yes, they all start with “V”), is inextricably connected to IDG Ventures Vietnam, which funded a host of other startups between 2004 to 2006 with an early fund of $100 million. Of course, some of the startups from this generation have failed, and some have become huge like the trio above. In the late 2000’s, a new generation of startups rose, along with the entrance in 2008 of CyberAgent Ventures, which was also willing to invest in smaller and larger startups. During this second wave, startups like Nhac Cua Tui, Tiki.vn, and others started to see a rise. Now, we stand in between this second and a third wave, marked dramatically by the rise and fall of Nhom Mua. In the end of 2012, this daily deals site, valued at over $60 million at the time, was seeing over $2 million in revenue per month.

All of these events have transpired and been discussed on Launch, a Facebook group that now numbers over 13,000 people. It is the heart of the Vietnam startup ecosystem online. During 2013, this group reached over 10,000 members, and the hype was growing in Vietnam’s two major cities, Hanoi and Ho Chi Minh city. And the news around the startup ecosystem has exploded with the worldwide virality of Flappy Bird and the massive investment of over $30 million from Vingroup into e-commerce. Amid this hype, there has been a growing concern among old and new startup leaders that there weren’t any incubators and accelerators in Vietnam producing investable startups. In fact, in 2012, a group of angel investors, which will remain undisclosed, who used to meet monthly to invest in startups, stopped meeting. There weren’t any startups to invest in.

This year, these groups have risen to meet the demand.

Investors in Vietnam who actively look for startups

Before we get into the incubators and accelerators, let’s first look at the investors who are currently looking for tech startups to invest in. It’s these investors that the incubators and accelerators are working to impress for series A rounds and onward.

1. DFJ VinaCapital – This firm, which first entered Vietnam in 2007 with an investment in Vietnam Online Network. It generally invests in later stage startups. For example, it invested $2 million into TS24, a company that builds software for the Vietnamese tax system. The firm is still actively looking for investments of this size and quality.
2. Sumitomo – Recently, investing a rumored $2 million in Tiki.vn for its series B round, Sumitomo is still actively looking at investing in Vietnamese startups, especially in the e-commerce category. We may see bigger announcements coming from them soon.
3. CyberAgent Ventures – CyberAgent remains one of the most active investors in Vietnam, still looking into e-commerce startups and feeling out startups like VeXeRe which currently sits in its offices as an investment prospect. And although CyberAgent Ventures is actively expanding to Thailand, it just finished another round of investment with DKT, an e-commerce solutions company. The head of CyberAgent Vietnam, Dzung Nguyen, has also confirmed that there are a few more investments coming soon.
4. OneCapitalWay – Another new player in the startup scene is OneCapitalWay, which partnered recently with 5Desire to fund an e-commerce company called Ahometo, which specializes in home decor. This angel investment firm, which includes several Googlers, is also actively looking at promoting young startups for pre-Series A funding. This firm may signal a new wave of Vietnamese American and Silicon Valley interest in Vietnam.
5. BTIC – This investment firm and coworking space far north of Ho Chi Minh city has already invested in two main companies: IG9, Vietnam’s Kickstarter, and Kleii, Vietnam’s Dropbox. Both services are currently on hold as the founders seek new contracts and/or business models that can scale. Nevertheless, BTIC is still actively looking for startups to invest in.
6. PVNI – This investment firm seeks seed stage investments for young startups in categories including education, food and beverage, and cloud computing.

In addition to these, there are still other, more quiet investment firms such as Lotus Impact, Mekong Capital, Kusto Tiger, and others from Japan and Russia. Nguyen Hoa Cuong, Deputy Director of the Ministry of Planning and Investment, has also indicated that there will be an influx of South Korean investors coming in 2014. This paints a promising landscape for the world of investment for young Vietnamese startups.

Incubators and Accelerators

Bonus: supporting and advising organizations for startups