Snapshot: Developing the Vietnamese Startup Ecosystem

Updated: Sep 25, 2018

Based in Silicon Valley, 500 Startups is a global venture capital seed fund and startup accelerator with an outstanding portfolio of $300M+ in assets under management and 1700+ technology start-up investments. In Vietnam, 500 is working on developing the country's startup ecosystem.

Last year, we were able to catch-up Mr. Hao Tran, then Associate at 500 Startups Vietnam for a short interview, in which he shared his experience working with the company in Southeast Asia. 

Since 2016, Carthage Global has been working with various actors of the Vietnamese startup ecosystem

Tell us about 500 Startups' work at the moment in Vietnam

At the moment, there are a lot of private equity firms and larger investment firms that are involved in later stage funding rounds. There is a lack of well capitalised seed stage investment companies for really early stage startups. That is where the capital is lacking, and investors have been skeptical about investing in this space. With our expertise, we are working to close that gap and provide capital to more entrepreneurs, especially to those who struggle the most to secure funding. 

Which characteristics are you looking for to invest in a startup?

It is really simple: the team, the traction, and the product. First we will look at the team. We are looking for founders with a strong experience in the industry the business is operating in, or in the tech industry in general.

Secondly, we look at the traction. Although we invest in early stage companies, we typically don’t invest in those that are only at the idea stage. We want to invest in companies that already have built and executed on the products. The startup should already have users of their products and generate revenue.

Candidates do not need to be outstanding but they have to show to us that they are growing. The third thing we look at are the products - do they solve a particular market demand? Since the market demand here is different than in the United States, we want to look at it through a Vietnam lens. Of all the 12 companies that we have invested in so far, a lot of them are solving problems on both ends of the spectrum and driven by the market they serve.

How much seed funding can a startup expect to get on average? What other package services do you provide startups?

On an average, they can expect a range from USD 25,000 to USD 250,000, although usually it’s between USD 40,000 to USD 100,000. It also depends on if we want to be just a participant or lead the round - the seed fund can vary. We provide our portfolio companies with perks such as access to Amazon web service credits, worth up to USD15,000 the first year; our mentoring network, additional investor support when seeking further investments, as well as an array of growth-hacking resources.  

Can you comment on similarities and differences in the Southeast Asian markets?

I had opportunities to work with our offices in other Southeast Asian countries, and I notice that each of them has their distinctive advantages. For instance, the Indonesian market size is very impressive, as they have the fourth largest population in the world with more than 255 million people. Meanwhile, Vietnam is very well renowned globally for engineering talent. Yet, they share the similarity of being under-served in terms investment, especially tech venture capital.

Can you comment on similarities and differences in the Southeast Asian markets?  

I was on a trip to Saigon, Vietnam, and my Airbnb host introduced me to a few entrepreneurs in the tech and hospitality fields. They were local, overseas Vietnamese and foreigners doing really cool things with almost no money. Since then, Vietnam has always been on the back of my mind, so when I found out that 500 Startups was raising a fund focused on Vietnam-connected startups, I jumped at the opportunity. 

This interview was completed with Mr Tran for Carthage Global's Marketplaces Fair Ho Chi Minh City in May 2017


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