Venture funds eye local technology start-ups
Venture funds eye local technology start-ups
Capital shortage is no longer a problem for many technology startups as many venture funds are increasingly pouring money into them.
Nguyen Hong Truong, vice president of IDGVV, said the fund had poured capital into some 40 Vietnamese companies since 2004. Many of the firms have grown into big joint stock companies, such as VNG, VCCorp, and Vat Gia JSC, which now have huge capital of millions of dollars.
Although DFJV (VinaCapital) has been in Vietnam for only seven years, it has invested in 10 companies, including VON JSC, which owns Kiemviec.com and HR Vietnam, a website on job services.
The foreign venture funds have brought financial support that startups cannot receive from commercial banks.
Truong of DFJV said he believes that venture funds will develop rapidly in the time to come with capital to be pumped into electronics and media companies.
He said investors have been attracted by an impressively high growth rate of 30 percent on average made by companies in the field.
Meanwhile, an analyst noted that venture funds will be most interested in the enterprises in supporting industries.
Many big international groups like Samsung, Doosan and Kumho Asiana are increasing their investments in Vietnam, particularly for the enterprises in support industries that would provide parts for the groups’ global production chains.
Analysts said that such investments were not as risky as some thought, and some Vietnamese venture funds have been established, including PVNI of Viet Nam Thinh Vuong JSC and BTIC of Becamex IDC. The funds have given technology firms more opportunities to access capital.
According to Dynasty Investment, there are about 20 venture funds operational in Vietnam with $2.5 billion in capital, including VinaCapital which is managing four funds with capital of $1 billion, IDG Ventures with $500 million, Mekong Capital with $181 million, Prudential with $130 million.
An official of the Ministry of Science and Technology (MST) noted that technology firms now have more choices for capital mobilization. In the past, they could only expect capital from three main sources – the state budget, commercial banks and their own capital.
MST has encouraged the establishment of non-profit investment funds with an aim to give financial support to new businesses to help them turn their ideas into reality.
Meanwhile, some successful Vietnamese businessmen have joined forces to form the Vietnam Science & Technology Enterprise Development Fund.
The fund, which has mobilized VND10 billion worth of capital, is expected to begin providing financial support soon after the organization re-structuring finishes.
MST is drawing up a plan on commercializing technologies under the mode of Silicon Valley and with the US experience, hoping to create favorable conditions for the technology commercialization in Vietnam.
Under the plan, each of 10 startups to be selected will receive initial investment capital of $10,000 from the program and receive intensive training for four months.
vietnamnet
