In the past three months, a growing number of local startups in various fields including electronics, logistics to financial services has successfully raised funds of up to millions of dollars from local investors, who in the past was less active compared to their foreign peers in the search for a hidden gem in the market.

The move came as a surprise given the fact that domestic venture investment funds only make up one fifth of the total 100 currently operating in Vietnam, in turn raising the question of whether such movement could become a trend in the coming time. 

Got It receives US$6 million from VNG.

Among major deals, local B2B logistics startup EcoTruck received VND100 billion (US$4.3 million) in its Series A funding in late 2020 from major IT firm VNG. A few months later, VNG continued to invest US$6 million in Got It – a digital gifting platform.

In January, VinaCapital Ventures poured US$1 million into GoStream, a startup providing platform for livestream in Series A funding, while Phu Nhuan Jewelry Company (PNJ) acquired 30% stake at Nguoi Ban Vang, a startup operating in the field of financial services, in a deal worth around VND3 billion (US$130,000).

Meanwhile, Vietnam’s major payment apps MoMo has set up its own investment arm to support local startups called MoMo Innovation Ventures.

CEO of EcoTruck Le Hoang Anh said as the firm is operating in a field with a foreign ownership cap of 49%, raising domestic fund would help EcoTruck keeping its working capital flowing and ensure business running smoothly.

“During the process of raising funds, domestic investors would face less legal hurdles compared to foreign peers,” said Anh, adding there would be more added value for local investors, including a potential partnership in the future.

Win-win situation

As the pandemic is wreaking havoc on global economy, more business leaders feel stronger confidence in technological advancement as an irreversible trend, therefore, the market expects more startup deals to come.

Nguyen Ba Diep, executive vice chairman and co-founder of MoMo, said most innovative startups face difficulties during their early phase of development, especially in the search for customers and accessing capital.

“For sustainable development, MoMo could not go alone, as such, we would use our venture investment fund to support enterprises growing in terms technologies and system upgrade,” Diep continued.

CEO of PNJ Le Tri Thong said “by cooperating with startups, major enterprises could accelerate their development process by accessing new technologies and solutions, which otherwise would take long time to develop by themselves.”