The US venture fund 500 Startups, is joining hands with two partners in Vietnam, a move which has been discussed in local newspapers since August.
The two partners are Tran Quoc Binh, a co-founder of Klout, and Eddie Thai, a senior consultancy expert for startups.
Thai said 500 Startups would deal with local startups and those from overseas Vietnamese who want to develop new products and services in Vietnam.
Doanh Nhan Sai Gon says that besides the ongoing four technology projects, 500 Startups plans to inject capital into 20 more projects in December.
The fund’s representative said on website Tech in Asia that it is going to open an office in Vietnam.
VnExpress, an online newspaper, reported that the government, aware of the important role of venture funds in the development of Vietnam’s technology firms, is building a legal framework to attract venture capital.
There are many reasons for foreign venture funds to eye Vietnamese technology startups. Vietnam is one of the fastest growing economies in the world. Young Vietnamese people have great potential to make breakthroughs in technologies. Vietnam has 40 million internet users and more than half use smartphones.
However, though Vietnam needs venture capital and foreign venture funds have high interest, the number of venture funds which funding Vietnamese startups remains modest.
Truong Gia Binh, President of FPT, Vietnam’s largest information technology group, said at a meeting between 70 young scientists and the Prime Minister recently that while venture funds have been very active in ASEAN countries, they have not entered Vietnam.
“Why don’t you think of entering Vietnam?” is a question Binh has raised to many foreign institutions and partners.
And the answer is usually: “We know Vietnam is good, but we cannot enter Vietnam because of the complicated procedures.”
According to Binh, it took FPT nine months long to follow the procedure to invite a Japanese company to a cooperation project in e-commerce.
“Venture funds do not enter Vietnam because the legal framework on venture investment remains unfavorable,” Binh noted.
Vietnam has laid down policies to attract foreign direct investment (FDI) and it has become one of the leading mobile device production bases in the world with the presence of Samsung, Microsoft and LG.
However, Binh stressed that Vietnam still needs venture funds to develop its science and technology.