ADB Ventures, an impact technology investment platform in the Asia Pacific, will support Vietnam’s early-stage innovators scale up their impact across developing Asia through a US$1 million investment.
| An overview of the event on October 7. Photos: MIC |
Speaking at the launch of the project “Supporting innovative early-stage enterprises”, which was co-held by the Asian Development Bank (ADB) and the National Innovation Center (NIC) under the Ministry of Planning and Investment (MIC), Tran Duy Dong, Deputy Minister of Planning and Investment said the Covid-19 pandemic has caused a decrease in new investments in Vietnamese businesses, especially venture capital flows for technology startups in the early stages of operation.
“The cooperation between ADB and the NIC is an important step to continue promoting cooperation in the coming time to mobilize resources, contributing to solving issues related to capital and operations of innovation and start-up enterprises in Vietnam,” he said.
The project targets innovative businesses and start-ups operating in the fields of clean technology (cleantech), finance (fintech), agriculture (agritech), and healthcare (healthtech). These are potential areas and priorities for development in Vietnam in the coming time.
Vu Quoc Huy, Director of the NIC said the project will provide businesses with technical support to help them access venture capital in Vietnam and other countries where have offices of ADB while avoiding market risk.
“The project encourages innovative startups to develop solutions that create positive impacts on climate change and gender equality,” he underlined.
At the event, Andrew Jeffries, Country Director of ADB in Vietnam said: “The fund will support and invest in solutions that conserve energy, reduce waste, shrink agriculture’s carbon footprint, and make people, communities, and industries more resilient to the impacts of climate change.”
The NIC in collaboration with ADB will search and select potential businesses operating in Vietnam that meet the project's conditions.
The project is expected to achieve15 viable ideas for ADB Ventures Lab and ten innovative businesses will receive funding from ADB Ventures Seed.
The ADB Ventures Seed program provides small-scale funding for promising business models that have strong potential to amplify their impact on climate and gender. Seed program funding provides a vital runway while giving ADB Ventures the opportunity to learn about the technology solution before deciding whether or not to consider larger equity or debt investments in future fundraising rounds.
The ADB Ventures technical assistance also includes a program called Labs. ADB Ventures Labs matches impact technology startups with commercial pilot opportunities through our regional corporate and public sector networks. The program can help Vietnamese startups that have achieved traction at home expand into other markets.
Prospects for Vietnam’s innovator community
The Covid-19 pandemic led to a global economic slowdown, causing a decrease in investment flows into Vietnam’s technology industry last year, or 48% compared to 2019.
However, Founder of Do Ventures Le Hoang Uyen Vy said the number of investments in startups in the first nine months of 2021 quickly recovered and returned to the level of 2020.
Total investment capital in 2021 is expected to reach over $1 billion, the highest figure ever of Vietnam's technology investment market. “This marks a major recovery for Vietnam's digital economy, a record year for venture capital,” Vy stressed.
| Source: Do Ventures, 2021 |
In the first nine months of 2021, most investment rounds have surged in both value and investment volume compared to the whole year of 2020. Investment activities focused on rounds with a value of $500,000 - $3 million.
The founder of Do Ventures forecasted in 2022, Vietnam is considered as one of the fastest-growing markets in Southeast Asia based on results of a recent survey on 50 venture funds in six markets including Indonesia, Singapore, the Philippines, Thailand, Malaysia, and Vietnam. Among the fields, education, health, and finance have received great attention.
In 2020, the number of early-stage investments with a value of less than $500,000 increased by 11%, but later-stage ones sharply declined in both value and volume due to the impact of the pandemic. The year 2019 was a very good year in the field of venture capital in Vietnam as investment capital doubled in comparison to 2018.
State agencies, organizations, investment funds, and the business community themselves are trying to find solutions to solve the problem of lack of capital for innovative businesses.
Within the framework of the event, the announcement ceremony of Southeast Asia's largest genetic testing center located at Hanoi-based NIC also took place on October 7. Genetica, a genetics testing company, artificial intelligence applied genomic testing company, partnering with the NIC to establish the center is expected to bring many advancements to gene research, in order to contribute to realizing the goal of Vietnam having a regional innovation and startup ecosystem.
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