Earlier in July, Vietnam was lauded in the coronavirus fight and reported zero deaths thanks to its drastic early actions. On July 25, a new wave of outbreak shattered the calm as Vietnam confirmed its first local COVID-19 case after 100 days of no new infections. Since hovering around the 400 mark in late July, the cumulative number of confirmed cases spiked past 1,000 as of this note. However, it appears that this new wave is now under control, with the past few days seeing no new confirmed cases, and it remains among the best countries in the world in total cases per capita.
As such, despite the recent outbreak, economists surveyed in early August identified Vietnam as among the three shooting stars in economic recovery alongside China and Taiwan. The country’s exports climbed 2.5% y-o-y in August as demand began to pick up. Vietnam became the number two biggest rice exporter in the world, surpassing Thailand. Meanwhile, the country is seizing opportunities from the EU – Vietnam Free Trade Agreement (EVFTA) that officially came into effect on August 1.
Vietnam and the US celebrate the 25-year anniversary of diplomatic relations this year. As part of the celebration, AmCham Vietnam organized the “HCMC-US Business Summit” on August 25, setting the stage for tech and innovation partnerships between the two countries. Speaking at the event, Binh shared his views on the future of fintech in Vietnam, alongside executives from Warburg Pincus, Mastercard and Momo, “The fintech ecosystem in Vietnam is in its infancy and there are greenfield opportunities in infrastructure, investments, insurance, lending, and even payments. We’re looking for the best startup teams that have access to proprietary data, have figured out low-cost distribution, and have partnered with local banks to address the growing needs of small businesses and consumers.”
We at 500 Startups Vietnam have been closely watching the current resurgence of COVID-19, particularly on its impact on startup fundraising and support. Here are some highlights from our past 2 months:
- We closed 5 investments in logistics, healthcare, edtech, productivity, and fintech.
- Batch 3 of our Saola Accelerator kicked off on August 17, welcoming 15 participants from 5 portfolio companies. This time fully virtual, Saola has hosted more than 20 lectures, workshops, and office hours so far.
- We joined several sessions with other business leaders in sharing our advice and support to founders and aspiring entrepreneurs at large, notably Binh’s sharing on the Amazon-sponsored “Building at VC Scale in Southeast Asia” podcast as well as Vietcetera’s “Homecoming Series” webinar, and Eddie’s sessions via “Female Founders Mentoring Hours” organized by Cocoon Capital.
Until next month,
Binh & Eddie
500 Startups Vietnam in the News
Martin Basiri of newly-minted unicorn ApplyBoard shared on the future of edtech. In May, 500VN-backed ApplyBoard announced a $75 million funding round, making it 500 Startups’ latest unicorn with a valuation of $1.4 billion. Martin had a virtual fireside chat with 500 Startups CEO Christine Tsai to discuss higher education, fundraising in this environment, scaling a company in the edtech space, and more. For more on the conversation, please visit 500 Startups’ blog.
Fortune: Demystifying ghost kitchens during the pandemic. In a conversation with Danielle Abril of Fortune’s Term Sheet in late July, Binh pointed out that the current environment bolstered opportunities for ghost kitchens given increased demand for food delivery. “I believe the shift in consumer behavior and need for ghost kitchens is likely here to stay,” said Binh. Investors from Accel and Battery Ventures shared the view.
Startup city: Vietnam’s young invest ideas in Ho Chi Minh City. Responding to AFP over the startup environment in HCMC, Eddie observed: “Although investment had paused due to the coronavirus pandemic, Vietnam is well-placed to bounce back. The country also has a huge pool of software engineers […] And unlike the tech talent in wealthy start-up hubs such as San Francisco or London, they understand what consumers in the emerging world want.”
AppOnboard brought on Riot Games’ CTO Mike Seavers as the new CEO. Mike is a 25-year game and software veteran who was heavily involved in the creation of Riot’s Legends of Runeterra as well as League of Legends. In his new role, Mike will oversee day-to-day operations and set the product vision for AppOnboard, including its two core products Buildbox and Studio.
Turing announced the close of their seed round. Turing’s mission to empower software engineers anywhere in the world has stayed true since they first started and that focus is starting to pay off. The company saw revenues grow from $17k last year to $10M this year, allowing them to close this round and prepare for further growth.
E-commerce startup Intrepid Group bagged Series A+ funding co-led by Thakral and Sun SEA Capital. Founded in 2017, Intrepid helps brands as well as small and medium-sized enterprises accelerate their growth on Southeast Asia’s e-commerce platforms, such as Lazada and Shopee.
Hiip secured bridge funding led by Vulpes, DealStreetAsia reported on July 23. The influencer platform helps some 500 brands connect with over 10,000 social influencers based on big data and AI. Hiip claimed that its revenue for June doubled compared to the same period last year.
Vu Van, Co-founder & CEO of ELSA, became an Endeavor Entrepreneur alongside five other entrepreneurs from five different countries. Endeavor currently supports more than 2,000 entrepreneurs leading 1,300 companies in 37 markets worldwide.
Founder sharing: Hung Phan, Co-founder & CEO of Papaya, talked with Asia Insurtech about Vietnam’s insurance landscape. Saola batch company RealStake sat down with Vietcetera to share insights into fundraising amid pandemic while Coolmate reflected on the journey to build a high-quality Vietnamese brand for menswear.
Vietnam in the News
In this issue, we cover 5 developments you need to know on the ground.
Coronavirus briefing: On July 25, Vietnam, lauded in the coronavirus fight, confirmed its first local COVID-19 case after 100 days of no new infections. The Southeast Asian nation is joining a number of other regions that had appeared to control outbreaks, including mainland China, Germany, South Korea and Hong Kong, in combating new clusters of unknown origin. Since hovering around the 400 mark in late July, the number of confirmed cases in Vietnam surged north of 1,000 as of writing. The coastal city of Danang, where the new outbreak resurfaced, sealed itself off from visitors and retreated into full lockdown, while Hanoi and Ho Chi Minh City reintroduced targeted social distancing. The efforts seem to have knocked out the second wave (knock on wood), as there have been consecutive days of no new confirmed cases lately.
Three shooting stars: Economists surveyed by Bloomberg in early August shared a bullish view on Vietnam’s recovery, citing most of Asia are seen suffering full-year contractions, except Vietnam, China, and Taiwan. The country’s exports climbed 2.5% y-o-y in August as demand began to pick up. Investors also appear confident in the government’s ability to handle its latest COVID-19 crisis. The nation’s benchmark equity gauge has since rebounded from bear territory as the flare-up initially unnerved the market. Turning 20 years old in July 2020, Vietnam’s stock market had seen its market capitalization surging nearly 3,000 times to around $240 billion and the number of foreign investors growing steadily over the years.
Green economic recovery? Vietnam turned from a net coal exporter to a net importer five years ago. The nation’s coal imports in the first half of 2020 surged by more than 50% to a record high of 31.57 million tonnes. Although the heavy reliance on imported coal for its electricity production may delay decarbonization, Vietnam is seen to accelerate away from coal and boost renewables along with South Korea, Chile, and Indonesia. Solar installation has skyrocketed from 100 megawatts in 2016 to 4.5 gigawatts last year. Hanoi committed to generating 21% of its energy from renewables by 2030, while also looking to remove 15 GW of coal generation. The sector has been busy attracting foreign investors: Sharp Corp. completed the construction of a 45-megawatt solar farm in Ninh Thuan province; Thai electricity company Gulf Energy Development acquired two wind power projects for approx. $200 million; the energy unit of Ayala Corp., one of the Philippines’ oldest conglomerates, announced it would build a 210-megawatt wind farm that would be the biggest in Vietnam.
Agriculture spotlight: With a bumper crop and good export prices, Vietnam’s rice export volume and turnover have exceeded Thailand’s, making the former the second-largest exporter amid the COVID-19 crisis. The opening of the Japanese market was the biggest thing to happen to Vietnamese lychee farmers this year. Vietnam is the world’s third-largest producer of lychee, after China and India, and ranks second only to Madagascar in exports of the fruit. Meanwhile, as robusta coffee heads for the biggest monthly gain in a decade, robusta crops expected in Vietnam in the 2020-21 season are also bullish for prices. The broader Vietnam’s agriculture sector posted a $5.2 billion trade surplus in the 6-month period to June, of which rice export value jumped 18.6% y-o-y to $1.7 billion.
International relations: Vietnam and the US celebrate the 25-year anniversary of diplomatic relations this year. Starting at $450 million in 1995, the bilateral trade value has increased 170 times to $76 billion in 2019. The US is the 11th largest foreign investor in Vietnam with investments in 43 out of 63 Vietnamese cities and provinces. On a separate development, the country is active in seizing opportunities from the EU – Vietnam Free Trade Agreement (EVFTA) that officially came into effect on August 1, particularly in expanding foreign investment in medical equipment and pharmaceuticals. Over our sea, when US secretary of state Mike Pompeo declared in July as illegal China’s vast maritime claims on the South China Sea, the region has become the focal point of Washington’s strategic rivalry with Beijing.
Vietnam Tech in the News
Southeast Asia will be home to 310 million digital consumers by the end of this year, reaching a number previously forecast for 2025, according to the latest annual Facebook Inc. and Bain & Co. report. The battle for online shoppers has been playing out intensely in the region. Closer home, we reported in the June newsletter that e-commerce rivals Tiki and Sendo were said to have agreed on a merger. However, we have recently learnt that the deal fell through.
Vietnamese startups have raised millions of US dollars during the pandemic. According to data compiled by DealStreetAsia, Vietnam witnessed a significant pickup in fundraising activities by deal count and value in the second quarter of 2020. Biggest tickets included Tiki’s $130 million investment from Northstar Group, making the e-commerce operator one of the top five funded startups in Southeast Asia in the period.
Grey line between safety and privacy. Bluezone, a mobile app commissioned by Vietnam’s government to assist in contact tracing during the novel COVID-19 pandemic, reached 21 million downloads (more than 20% of Vietnam’s population) as of writing. As the application traces its users’ whereabouts, it has sparked ongoing concerns over user privacy.
In a recent development, Vietnam’s VNG hits TikTok with copyright infringement claims. The entertainment giant VNG is reportedly suing ByteDance’s short-video app, claiming TikTok doesn’t have the license needed to use audio tracks owned by VNG subsidiary Zing on its platform. TikTok made its official debut in Vietnam in April last year, claiming to have over 12 million active users in the country.
Zooming in fundraising activities in July and August: Vietnam-based OKXE.vn, an online marketplace for motorcycles, raised $5.5M in a Series A funding round led by South Korea’s Partners Investment; Wavemaker Partners put $500k in e-commerce Foodmap; Next100 invested $500k in AI startup Computer Vision Vietnam; NextPay invested $475k in CNV Loyalty; online community for moms WeCare raised a seed funding from TheVentures.
Startup Arena Pitch Battle by Tech In Asia x Sequoia Surge, 10/19-22. Pitch to Binh and other renowned SEA VCs at Startup Arena Pitch Battle at the heart of Tech In Asia Conference. The battle provides a platform for startups to pitch directly to investors and get instant exposure throughout Southeast Asia. Apply to pitch here.
Elevating Founders Asia, 9/29 – 10/1. As part of the flagship startup event ConnecTechAsia, Elevating Founders enables high potential Seed and Series A tech startups exclusive access to the enterprise marketplace and curated investors, this time with Binh and other pan-Asian VCs. More information here.
Vietnam AI Day 2020 by VinAI, 9/12-13. Organized by VinGroup’s VinAI, Vietnam AI Day is the annual event for AI experts around the world to discuss the latest developments in academic research as well as commercial applications of AI in Vietnam. Register here.
VietChallenge Finale, 9/12 – 10/10. The global startup competition for Vietnamese founders is approaching its final rounds. The top startups will participate in virtual demo days and a Startups Championship Day in Boston. More information here.
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