Ho Chi Minh’s tech sector is attracting global attention. Source: Wikimedia
Silicon Valley venture capital firm 500 Startups is starting a US$10-million fund for Vietnam to back the country’s tech sector.
Growing internet access and mobile phone use that exceeded the 94-million population was attracting attention to the home of 2014’s Flappy Bird phenomenon, said Binh Tran, a 500 Startups partner.
The firm has previously backed ecommerce and online messaging services through another fund spread over the whole of Asean.
Venture capitalists are targeting the emerging middle class and an economy growing at more than 6-per-cent each year. More than half the population has internet-access.
Tran, also a co-founder of Klout Inc, said: “There are a lot of the main ingredients here that make it attractive. You have low-cost, high-tech talent, engineers and coders who are able to build and develop products as well as their counterparts in Silicon Valley who work at Google and Facebook, for a fraction of the cost.”
Ecommerce, language-learning and price comparison start-ups were among the firms looking for funding with plans to invest around US$250,000 in as many as 150 companies, he said.
500 Startups has invested in 1,500 firms in more than 50 countries since 2010.
UK-based consultancy We Are Social reported that smartphone ownership was growing quickly in Vietnam and that 55 per cent of adults in the country now used one. Around 41 per cent of the population is younger than 24, according to the CIA World Factbook data.
Eddie Thai, a 500 Startups venture partner, said: “I’ve been watching the tech scene here since 2010, and back then it was way too early [to invest]. Over that period of time, the macros [macroeconomic conditions] improved. Internet access improved, smartphones became ubiquitous. This is our call to everybody to say we’re investing, come to us.”
Founder of 500 Startups Dave McClure said: “People think we are crazy, but we look at the numbers and feel it is a great opportunity. The cost of failure is fairly low. If we are investing in 100, 200 companies we are going to find wins 20 per cent of the time, big wins. It’s sort of like fishing in a barrel full of Koi.”
Vietnamese-Americans, many from Silicon Valley, were heading to Vietnam to invest in companies that could produce software for the US and other markets, he added.