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‘A rising market’ in Vietnam: Q&A with Chelsea Nguyen, principal of ThinkZone

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As some sectors mature in Vietnam, the country may be Southeast Asia’s next great market.


Vietnam’s startup and investment network may be smaller than its counterparts in Singapore, Jakarta, or Kuala Lumpur, but there is no shortage of talented individuals who are building services that solve problems for people in the country. Some have even made games that have garnered global recognition.

This scrappy attitude stems from a culture of bootstrapping problems when resources may be limited. In an interview conducted in early April, ThinkZone principal Chelsea Nguyen spoke with KrASIA about the unique characteristics of Vietnam’s tech scene, as well as the crucial elements that are needed for the space to evolve.

This interview has been edited for brevity and clarity.

KrASIA (Kr): The capital for ThinkZone’s Fund II was sourced from limited partners (LPs) within Vietnam. Was there a particular reason behind keeping the fund fully domestic?

Chelsea Nguyen (CN): In 2020, when we were thinking about raising a fund, the process was typical. We reached out to hedge funds and family offices in Europe and Asia. At the time, we believed that those firms were more comfortable with risky investments, whereas Vietnamese investors may not have been ready for that because the startup ecosystem is still quite new here. But travel restrictions prevented us from meeting foreign investors, so we faced difficulties in that area.

At the same time, cryptocurrency was becoming popular in Vietnam, and we realized that there is plenty of capital in our own country. We started to change our approach. We met local investors who then became our LPs. We realized that they share the same line of thinking as us and believe that the local market is very active, with more people finding out about startups. We raised our fund quickly from only four LPs. It was a lean beginning.

Kr: Vietnam reopened its borders in March. Does this mean you may be meeting more foreign investors and working with them soon?

CN: I have met many foreign investors who came to Vietnam recently. They’re in Vietnam searching for new deals. Some investors from South Korea and Singapore are raising Vietnam-specific funds, so there’s huge interest in our country’s startup ecosystem.

Kr: How should investors view Vietnam compared to, for example, Indonesia and Singapore?

CN: Vietnam can be categorized as a “rising market.” In Indonesia and Singapore, there are too many VCs and not enough entrepreneurs and startups, so valuations tend to go crazy in those markets, and people may look for deals in other places.

If the same situation happens in Vietnam, where there are many VCs but not enough startups, then investors will look for opportunities in other places too.

Kr: With Fund II, ThinkZone has formed many partnerships with Vietnam’s conglomerates. How will these types of partnerships help the startups that receive investments from Fund II?

CN: First, the startups can leverage the unused resources of the corporations. For example, we have a partnership with the largest out-of-home (OOH) advertising company in Vietnam. They have many banners and outdoor advertising channels. When those channels aren’t utilized fully, they can be given to the startups as support. When the startups see that there are good results from those advertisements, then they may begin to pay for and use them.

This type of partnership was duplicated from the relationships formed between corporates. ThinkZone is the bridge for startups to access those resources. At the same time, corporations can monetize the startups’ growth.

Kr: Has that corporate interest in local startups always been there, or is it a recent development?

CN: The interest is a recent thing. Vietnam’s corporations have been looking at startups as investment targets for less than a year. They’re now familiar with Tiki and Sky Mavis and realize that startups can become huge businesses, so they want to become part of that.

Take banks as an example. These financial institutions are now very open to partnering with startups to reach new customer segments and test out new solutions.

Kr: What do those partnerships between conglomerates and startups look like?

CN: It typically starts small, with a pilot phase where both sides can gauge each other’s capabilities. The startups may want to see whether the corporates are agile enough to move quickly. Corporates may want to see if the startups can deliver on their promises.

For example, we recently set up a fintech startup with a bank for “buy now, pay later” services. The pilot phase involved deposits into the bank, then the bank issued loans to consumers on behalf of the startup. Six months later, they wrapped up the pilot and started to offer riskier services, like lending money without collateral.

Kr: We recently learned that game developers in Vietnam developed ad hoc training programs to cultivate talent over the past decade. Do you see a similar mindset in other sectors, whether it is fintech, electrical vehicle development, or any other space, where startups also function as training grounds for new talent?

CN: It’s true that there is a mindset to cultivate talent from within. Even on our side, as investors, there is no formal training in Vietnam to help people become venture capitalists. For example, I didn’t study finance at university, and most of ThinkZone’s team was not formally trained to become VCs.

Vietnam doesn’t have courses that teach people how to become entrepreneurs. In our accelerator program, we teach people about design thinking, product development, and customer research. This gives entrepreneurs the skills to define problems and build products to solve specific problems as a lean startup.

What I like about Vietnamese entrepreneurs is that, even though this isn’t taught by universities, if they realize they need to learn something, then they will find a way to learn it. All the entrepreneurs behind startups in ThinkZone’s portfolio are active learners.

I want to emphasize that we don’t need more formal training. What we need is a growth mindset to continue learning. If we can create an environment where people can openly share information, then they will learn from each other’s experiences.

Kr: Now that VinFast has established itself as a serious EV maker, do you see interest brewing for new grads to join the EV sector, perhaps cultivating stronger interest in vehicle design and engineering?

CN: If you had asked me this question two years ago, I would have said we lack the resources to be successful in this space. Vietnam is known for its software development thanks to companies based in Japan, the United States, and European countries that outsource their platform development to coders in this country.

But over the past two years, we’ve observed many professionals with backgrounds in hardware development returning to Vietnam. These are individuals with PhDs from universities like MIT after a few years of working for GM or other auto brands in the US.

Because of that, new EV and hardware startups are cropping up in Vietnam. We’ll still need five to ten years for the underlying infrastructure to catch up. We still import many components from abroad, and some of those supply chains are difficult to manage. At the moment, much of this is beyond the control of the startups.

Kr: If there’s one thing that you feel is crucial but missing in the Vietnamese tech and investment ecosystem, what might that be?

CN: Money doesn’t always come with good advice. We see some investors giving entrepreneurs money without offering advice on how to sustainably build a business. We need angel investors who can provide good guidance about what could go wrong with a startup in its early phases.

Kr: We’ve seen Vietnamese startups grow rapidly into large companies. Compared to their counterparts from other countries in Southeast Asia, companies based in Vietnam tend to stay within their home market instead of expanding across borders. Why do you think that is the case?

CN: If you look at the population numbers, Vietnam is a market with 100 million consumers. This is sizable for any entrepreneur, but in our case, it is also a curse because startups then tend to serve the local market and overlook overseas expansions.

If you are in certain sectors, like e-commerce or fintech, targeting 100 million consumers is enough for you to become a unicorn. But they would have no advantage by expanding to Indonesia, Singapore, or Malaysia. They could expand to Cambodia or Laos, but more research needs to be conducted to ensure the conditions are right.

Kr: You mentioned earlier that crypto has become popular in Vietnam. What areas of crypto are growing in the country?

CN: Vietnam has many game studios, and the country is very active in GameFi. However, we are not sure if GameFi really delivers value to users.

We are trying to look beyond areas like games and entertainment. We want to see if blockchain can add value in logistics, real estate, and other industrial contexts.

KrASIA is a digital media company reporting on the most promising technology-driven businesses and trends in the world’s emerging markets.

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