November 23, 2024

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HO CHI MINH CITY -- Since its foundation nearly a decade ago, 500 Startups, a Silicon Valley-based global startup accelerator and incubator, has built up over 2,200 companies in more than 70 countries.

Last year, its global network added seven companies to the club of unicorns -- startups valued at $1 billion or more -- bringing the total to 10 as of the end of 2018. They include Grab and Canva.

Particularly in Vietnam, 500 Startups prides itself on having played a critical role in building up the startup ecosystem. 

“500 Startups Vietnam has actually changed a lot in the ecosystem,” Eddie Thai, general partner of 500 Startups Vietnam, said in an interview with The Investor. “Prior to our entry, we saw that people weren’t all convinced by the opportunity and timing regarding Vietnam just yet. We had to spend a lot of time explaining about Vietnam, telling people what was happening, where we saw the market going and why it made us invest.”

Eddie Thai, general partner of 500 Startups Vietnam, speaks during a recent interview with The Investor at its headquarters in Ho Chi Minh City. Son Ji-hyoung/The Investor

Born in the US, with a background in consulting and private equity, Thai, along with his partner Binh Tran, has helped expand the accelerator’s presence in Vietnam since its launch in March 2016. Based in Ho Chi Minh City, his team consists of eight members.

Of the $454 million that 500 Startups had committed worldwide as of end-2018, $14 million will go to Vietnam-connected startups. The fund announced a final closing with oversubscription last year.

500 Startups Vietnam has since been focusing on early-stage round funding, involving 42 portfolio companies as of May this year.

All this did not come easy, Thai said, adding that it takes more than fast economic growth and high internet penetration.

That's why despite that 500 Startups has run some 50 batches of startup accelerator programs around the world, its Vietnamese unit has yet to host even one.

Still, things are looking up, as its new startup accelerator program is on deck. The program, dubbed “Saola Accelerator,” will be launched in June, in collaboration with Seoul-based online commerce platform operator GS Shop. It was named after saola, an endangered species also known as the “Asian unicorn,” which inhabits wet forests and is only found in eastern Indochina, including parts of Vietnam and Laos.

“We see it as a Silicon Valley-inspired, Vietnam-based accelerator program,” Thai said.

Around eight startups will participate in the three-month-long program.

The launch of Saola reflects the high pace of growth in the Vietnamese startup ecosystem, which is supported by three pillars -- e-commerce, logistics and digital payment.

Some two-thirds of venture financing in Vietnam went into either of these three categories, while the ultimate winner in each category has yet to be seen amid fierce competition, according to Thai.

“In the coming years, there will still be a lot of financing because all three categories require a lot of cash,” he said. “That’s a high-burn bloody battle.”

In the meantime, startups dealing with solutions to deeper problems faced by consumers and enterprises are expected to thrive, as the Vietnamese economy grows and startup ecosystem matures, he added.

“E-commerce information, ride-hailing, digital payment are what’s been historically happening till now (in Vietnam), but what’s happening after that is a lot related to what any middle-class family is concerned about anywhere in the world,” he said.

“After you have fed your family and put food on the table, after you have your roof over your head, what you are looking at is how to save for the long term, how to educate your children, how to insure against risks and how to take care of their health. That makes for a much more complex space but also much more exciting space if you find and back the winners.”

By 2020, 500 Startups Vietnam aims to invest in 80 to 100 startups with its $14 million fund. 

This article is the result of collaboration between the Korea Herald and Antara, sponsored by the Korea Press Foundation.

By Son Ji-hyoung (consnow@heraldcorp.com)