Vietnam’s startup ecosystem has been flourishing these past few years, with 2021 seeing well over a billion dollars invested into local businesses (indeed, some reports estimate this figure at as much as $2.4 billion). The sheer growth of VC investment in Vietnamese startups – particularly tech startups – shines a light on the innovation taking place in the country from grassroots right the way up, as well as the top-down willingness to nurture a more varied and agile economy.
Since the government announced National Program 844 in 2016 – an initiative led by the Ministry of Science and Technology to promote the development of fast-growing businesses – startup enterprises have been emerging at an unprecedented rate.
Better yet, many have been receiving the kind of major funding needed to scale and make a large impact on the market. One of the greatest examples is the fintech app MoMo, which announced a valuation of $2 Billion in late 2021.
ThinkZone Fund II: An Opportunity To Grow From Within
Though Vietnam has grown into a dreamland for venture capital over the last half-decade, it’s worth noting that much of this funding comes from overseas. Singapore is the clear leader in foreign investment in Vietnam, however, there is a small and growing number of funds founded in and focused on Vietnam alone.
In February, Hanoi based ThinkZone, a venture capital firm focusing on tech startups from Pre-Seed to Series A, announced a new $60 million fund dubbed ‘ThinkZone Fund II’, which the company has raised in collaboration with Phu Thai Holdings, IPA Investment Corporation, and Stavian Group, and over 20 other companies.
The new fund becomes the largest local one of its kind that the country has seen to date, and it’s intended to boost startups across a number of verticals, from finance to retail, manufacturing, agritech, and F&B.
While foreign investment is a positive indication of the health of the ecosystem, a local fund of this size is a real shot in the arm for Vietnamese startups, who can benefit not just from financial resources, but also from the local market access, business networks, and the legal and bureaucratic knowledge of member companies.
Accelerators As Well As Investment
Beyond creating ThinkZone Fund II, the firm has also announced its latest accelerator program, ThinkZone Accelerator Batch 5, which is aimed at helping more early-stage startups scale up or indeed validate their product offerings. As well to direct investment from $50,000 to $200,000, startups can also receive tech support packages, mentoring, and partnerships, as well as gaining access to a wide network of venture capital firms.
An open door, applications to join the program are welcome from any early-stage startup in Vietnam. This kind of initiative is set to serve as yet another boost for the startup ecosystem, in which there are multitudes of promising companies not yet ready to receive major investment, but need assistance in expanding operations nonetheless.
Local Startups Set To Benefit
ThinkZone II has already made its first major investment, announced in 2021 by Gimo, a fintech startup designed to serve underbanked workers. That a fintech company was the first reported to receive backing is no major surprise – 70% of investment in 2021 went to fintechs after all.
However, it’s worth noting that Gimo’s mission to help Vietnamese workers with Earned Wage Access (EWA) comes from an angle of community and social responsibility. While this aligns with the government’s plan to significantly increase financial inclusion in Vietnam, it also points to a new avenue for startup enterprise and capital investment – social development.
Last month, Vietcetera wrote of how community-friendly and eco-friendly initiatives may be the next frontier for venture capital-backed startups, an idea backed by early-stage investment fund ITI’s Ngo Dinh Dat. Speaking to Vietnam Investment Review, Dat name-checked “business projects that contribute to community development and sustainability,” as the “prominent startup trend in Vietnam.”
While ThinkZone II has cast its net wide and named a whole host of industries as potential avenues of investment, it would be no surprise to see companies that aim to serve a greater good receive their backing in the coming years.
The story was produced in partnership with the Initiative for Startup Ecosystem in Vietnam.
This story program "Initiative for Startup Ecosystem in Vietnam until 2025" (also known as National Program 844) was approved by the Prime Minister on May 18, 2016, and assigned to the Ministry of Science and Technology of Vietnam in charge of implementation. The program aims to create a favorable environment to promote and support the formation and development of fast-growing businesses based on the exploitation of intellectual property, technology, and new business models.