Over the last couple of months, we have found ourselves amid extraordinary scenes. Vietnam’s economic growth accelerated in the third quarter, retaining its status as one of the few places in the world to avoid contraction amid the pandemic. The IMF estimated Vietnam’s GDP would reach $341 billion in 2020, exceeding Singapore for the first time.
Meanwhile, fintech fascination got headlines as Vietnam’s second unicorn is reportedly hiding in plain sight. Several late-stage funding rounds were also announced.
However, the economic recovery was overshadowed by severe floods and mudslides in Central Vietnam, which have killed and displaced at least 235 people and destroyed or severely damaged more than 300,000 homes. Our thoughts and our hearts are with those affected by the devastation. Over the last few weeks, 500’s portfolio Coolmate initiated a fundraising campaign to contribute to the region’s emergency response, in addition to several small-scale efforts by our staff and portfolio companies. If you would like to contribute to the disaster relief efforts, we recommend the fundraising campaign “Our Hearts to Central Vietnam” initiated by AmCham Vietnam and VinaCapital Foundation, a 501 (c)(3) non governmental organization chartered in the US and licensed in Vietnam.
Finally, of course, was the U.S. presidential election. The outcome will have many implications for many different policies. But with respect to Vietnam’s economy, we think there would be no meaningful change either way. From Bill Clinton to George W. Bush to Barack Obama to Donald Trump, the U.S. has steadily deepened its ties with Vietnam for geopolitical considerations (i.e. China) and other factors. U.S. diplomats in Vietnam have only expressed an unwavering commitment to developing this strategic partnership.
Here are some highlights from our past 2 months:
- We closed 2 investments (edtech; enterprise SaaS), increasing our portfolio to 70+ companies
- We wrote a follow-on check into a healthtech portfolio company
- In honour of Vietnamese Women’s Day, we’re spotlighting some of our extraordinary women founders in this issue. Scroll down to learn more!
- Batch 3 of Saola Accelerator is in full swing and preparing for a Demo Day at the end of November
- As part of the training program for aspiring angel investors organized by Women’s Initiative for Startups and Entrepreneurship (WISE), Saola Program Manager Hau Ly co-led a 3-hour session on the topic of “Understanding Startups and Investment Opportunities.”
Until next month,
Binh & Eddie
500 Startups Vietnam in the News
As Vietnam celebrated Vietnamese Women’s Day on 10/20, we’d like to take this opportunity to highlight recent developments of some of our extraordinary women founders in this issue.
CNBC Make It spotlighted Vu Van, co-founder of ELSA, as the AI-powered language platform hit around 11 million users and tapped new markets. The coronavirus has sparked a revolution in education, pushing schools and institutions online and driving new demand for e-learning apps.
UNest, a mobile app that helps parents build college nest eggs for their kids, acquired 500VN-backed Littlefund. Littlefund founder Mimi Chan joined UNest as Head of Experience to continue her mission to make financial solutions more affordable, accessible, and user-friendly for a new generation of parents. The integration doubled UNest’s user base to over 60,000 people.
Bicky Nguyen and Cricket One team won the championship at the 5th annual VietChallenge, a global competition for Vietnamese innovators, on October 11. Cricket One, which supplies food ingredients extracted from crickets, is one of the global leaders in supplying sustainable and affordable protein.
Ha Nguyen, founder of Canal Circle, joined hands with other women leaders in launching Ignite Initiative on October 29 in Hanoi. The nationwide women empowerment initiative aims to provide 50,000 women-led SMEs with financial and technical support.
Saola batch company Schola led by Nhu Tran was one of the top 5 finalists of the APAC Edtech Venture Competition. Since its launch in 2019, the edtech startup has conducted more than 60,000 online classes for Vietnamese children.
Debbie Wei Mullin sat down with Subtle Asian Food to share the passion and the sequence of events that led her to launch Copper Cow Coffee, and discuss strategic decisions she has made in 2020 that set up the business to outlast the pandemic.
Are you a woman entrepreneur? Would you like to join the community of #500strong women founders like Vu, Debbie, and Bicky? Write to us at firstname.lastname@example.org or email@example.com and let us know how we can help!
Other portfolio updates
ApplyBoard raised another $55 million in a Series C extension funding round in September, with participation from Index Ventures, Educational Testing Service (makers of the GRE and TOEFL), and other investors. ApplyBoard has experienced a 300% uptick in new schools sign-ups during the pandemic.
Social gaming startup Bunch snagged a $20 million Series A led by General Catalyst with participation from many of the major gaming companies. Bunch’s number of monthly active users has grown 50X since March, reaching north of a million.
Saola batch company Papaya won the grand final of Startup Arena Pitch Battle presented by Tech In Asia and Sequoia Surge.
Base launched its HR management solutions, Base HRM+, in an event attracting 700 business leaders on October 29 in Ho Chi Minh City. The SaaS startup was previously mentioned by TechCrunch as the top enterprise collaboration platform in Vietnam.
Vietnam in the News
While emerging markets are heading toward the last quarter with more reasons to be cautious than optimistic, Vietnam is the only major Asian economy besides China expected to register positive growth this year. The IMF estimated Vietnam’s GDP to reach $341 billion in 2020. The figure would place Vietnam as the fourth largest economy in ASEAN this year, exceeding Singapore for the first time. Optimism over Vietnam’s economy led the country’s stocks to rally the most in seven weeks in late October, helping the benchmark gauge erase its year-to-date losses.
Bolstering recovery | Vietnam’s economic growth accelerated in the third quarter, retaining its status as one of the few places in the world to avoid contraction amid the pandemic. GDP rose by 2.62% year-on-year in the July-September period, up from a revised 0.39% in the second quarter. Q3 outperformance was fueled by surging manufacturing and export of electronic parts, steel, and other key industrial products that had been hit hard by the virus. Aggressive rate cuts by the central bank for the third time this year are also a factor behind the country’s growth.
Factories showing progress | Aided by the increase in export orders, Vietnam’s manufacturing activity accelerated with the Purchasing Managers Index (PMI) improving to its best in more than a year in September, then staying in expansionary territory throughout October. Many of Vietnam’s garment makers change course to produce personal protective equipment to offset the fall in textile exports as a result of the pandemic. Meanwhile, the country continues to be a favored destination for businesses looking to diversify supply chains away from China. It’s set to be a key hub for manufacturers including notebook PC contractors (e.g. Foxconn, Wistron), TV producers (e.g. Samsung), and automakers. Regarding automakers, South Korea’s Hyundai Motors has begun working on a $140 million second plant in Vietnam that will boost its capacity by 140%. Vietnam’s Vinfast, a subsidiary of Vingroup, has a new $3.5 billion, 36.1 million-square-foot factory in Haiphong, where it’s building e-scooters, electric buses, and electric cars.
Expanding trade ties | In the third quarter, exports jumped 11% to $80 billion. Exports to the US, Vietnam’s largest export market, increased 12.7% to approx. $55 billion. In a separate development, Vietnam-UK economic relationship is taking to the next level: a bilateral free trade agreement (FTA) between the two countries has been initiated, and the UK is having Vietnam’s support to join Trans-Pacific Partnership (TPP), an 11-member multilateral trade pact.
Coffee mixed fortune | In September, Vietnam reportedly relegated Brazil to become Japan’s top coffee supplier for the first time ever. Later, however, unceasing rains from La Nina plus tropical storms in Vietnam’s central highlands have put robusta harvesting on hold.
Currency investigation | The export jump was overshadowed by another development in the Southeast Asian nation: On November 4, the US announced the imposition of a preliminary anti-subsidy tariff on car and truck tires from Vietnam. The move followed the Trump administration’s October 2 announcement of a trade investigation into Vietnam’s currency policy to determine whether an undervalued dong hurts American businesses. In a response to the earlier trade court case, Vietnam’s Prime Minister Nguyen Xuan Phuc disputed claims that the country devalued its currency.
International relations | South Korean Foreign Minister Kang Kyung-wha visited Vietnam on September 18, marking the first visit by a high-ranking diplomat to Vietnam since it closed its borders in April. Japanese Prime Minister Yoshihide Suga reached an agreement to send defense equipment to Vietnam during his inaugural summit abroad to Hanoi on October 19. Meanwhile, escalating tensions over the South China Sea loomed large in the virtual 53rd ASEAN Foreign Ministers’ Meeting, where this year’s chair – Vietnamese Minister of Foreign Affairs Pham Binh Minh – called on parties to exercise restraint and act in accordance with the United Nations Convention on the Law of the Sea.
Vietnam Tech in the News
With 34 e-wallet providers granted licenses by the State Bank of Vietnam, the country of 97 million population is already a battleground for fintech players betting on a China-like digital payment revolution. Currently, MoMo, Moca, and ZaloPay are the three prominent e-wallets in Vietnam’s two main cities, accounting for more than 90% of online payments.
Newcomers, however, have joined the crowd. Earlier in September, Indonesia’s Gojek acquired a majority stake in Vietnam’s WePay to secure a much needed e-wallet license. Later on, a subsidiary of game publisher Appota Group, AppotaPay, followed the trail.
Meanwhile, VNLife, owner of one of the largest QR code payment networks in Vietnam — VNPay, has quietly become “north of a unicorn” after its funding round last year that roped in Softbank Vision Fund and Singapore state fund GIC. This would make it Vietnam’s second billion-dollar tech company after gaming and entertainment firm VNG. VNLife’s approach echoes the strategy used by Chinese fintech giant Ant Group, which is due for a massive public listing. Like Ant, VNLife serves financial institutions and partners with them to offer financial products to the public.
As significant as VNLife’s unicorn status, Vietnam’s NextPay is considering a private placement to raise up to $100 million in early 2021, ahead of a planned stock market listing the following year. The company is the first, and so far only, fintech company in Vietnam to announce plans for an IPO.
Is Vietnam ready for an online-only bank? Timo Plus thinks so. The digital bank relaunched its services with a new plan to bring in more business.
Elsewhere, European fintechs — including Revolut and Thought Machine — have been quietly moving into Asia, hoping to take advantage of fast growing and highly digital markets. Singapore, Vietnam, and Indonesia are seen as particularly attractive locations.
E-commerce | With B2C e-commerce in the midst of a high-burn war, it’s expected that investments will pick up in the B2B e-commerce space. Recently, Vingroup through its newly-established internet company One Mount Group launched Vinshop, where small grocery store owners can import goods at wholesale prices directly from their suppliers.
Fundraising roundup | Several late-stage funding rounds were announced in the last 2 months. Seedcom secured $50 million from China’s eWTP, the Alibaba- and Ant Group-backed investment fund. Online travel agency Vntrip raised a $7 million Series B extension. Meanwhile, Patamar Capital, Viet Capital Ventures, and East Ventures joined hands in a Series A financing (amount undisclosed) into fintech company Kim An Group.
On the early-stage front, fintech startup Wee Digital raised a seven-digit funding round from InterVest and existing backer VinaCapital Ventures. Restaurant and lifestyle service review platform Riviu secured $3.6 million in seed funding. Thinkzone led a funding round into local ride-hailing management platform EMDDI while Do Ventures invested $900k in F99.
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