President Obama, who recently visited, isn’t the only one who sees potential opportunity in Vietnam.
The Silicon Valley seed investor and startup incubator, 500 Startups, has announced it will pump $10 millions into 100 to 150 of Vietnam’s tech companies, one of the biggest bets yet on the communist country’s burgeoning tech scene.
The Wall Street Journal reported on the fundamentals of Vietnam’s tech economy: “U.K.-based consultancy We Are Social says smartphone ownership is growing quickly in Vietnam, and that 55% of adults in the country now use the devices. The country is also young: Some 41% of the country’s more than 94 million people are below the age of 24, according to CIA World Factbook data. That means there is a huge potential for companies to tap into a growing base of users.”
The Wall Street Journal talked to Eddie Thai, a venture partner at 500 Startups, about the investment, asking if he really thought infusions of less than $100,000 per firm would really make a difference. In response Thai said that the money would go a long way in Vietnam because, while the country’s tech talent is steadily improving, human capital remains relatively inexpensive.
A lot of the credit for Vietnam’s success in this arena goes to government officials who long ago decided to focus on building a tech-friendly environment, PC Magazine reports.
“Vietnam barely had any IT companies 15 years ago, but now there are close to 14,000 IT businesses spanning hardware, software, and digital content. The Vietnamese government sees the tech sector as the linchpin of the country’s economic growth, according to Mr. Long Lam, CEO of QuangTrung Software City (QTSC), Vietnam’s largest software park. It has heavily invested in infrastructure and passed economic policies encouraging both domestic and international entrepreneurs to start businesses.”
In addition to funding software parks and generous tax deals, the country has focused on creating a robust system for computer science education, PC Magazine:“Vietnam’s universities are competitive. The Da Nang University of Science and Technology’s IT Department admits only 250 students a year—out of more than 2,000 applicants—chosen based upon the results of a national standardized competition. Dr. Nguyen said most of his students come from poor, hardworking, central Vietnamese families. “IT workers are an in-demand resource,” said Dr. Nguyen. “Some of my students work for big companies. Some created small companies of around 10 or 20 employees. We are also developing a new incubator program next year for students in IT. We want them to develop the right skills. The problem in Vietnam is everyone wants to go to university.”
BBC reports that while many of the investors are foreign, Vietnam’s investing class is driving a good deal of the action: “But Vietnam’s tech scene isn’t made up of eager ex-pats alone. In 2004, Vietnamese entrepreneur Dinh Anh Huan co-founded the mobile phone retail chain Thegioididong.com, which means The Mobile World in English. Last year, the company made its stock market debut, raising more than $250m. “I got around $30m,” says Mr Huan. “I invested in around 20 companies in Vietnam. Right now, my vision is not about the money. My vision is to create products in Vietnam and export them to other countries.” Those products range from the agricultural – he has tea, coffee, strawberry and flower farms – to retail. Mr Huan has invested in a chain of mother-and-baby stores, a women’s shoe factory, an online fashion site and Vietnam’s second largest e-commerce site, Tiki.vn.”