Above: Hai Ba Trung Street in Hanoi erupted with football fans after Vietnam beat Thailand to claim the SEA Game 31 football gold medal. Photo by Gia Trinh.
Hello everyone,
As you receive this newsletter, the 31st SEA Games, a multisport event involving participants from 11 countries in Southeast Asia, has just concluded in Hanoi. With this event and lowered entry requirements for international arrivals, Vietnam is again flocked with tourists and business visitors, signaling a robust recovery in tourism, aviation, and other sectors. Vietnam’s gold medal win in football over Thailand erupted in a massive street celebration with millions of revelers armed with pots and pans, air horns, and kazoos flooding the streets in Hanoi and Ho Chi Minh City causing happy deadlocks for many hours.
In the tech ecosystem, deal activity continued in late April and May, including a couple of late-stage fintech deals and various early-stage financings in agritech, EV manufacturing, e-commerce, and robotics. However, the recent public market correction and uncertainty will impact the private markets, starting with late-stage companies and then moving towards the seed stage, where we focus. This rapid shift in the market will force both investors and founders to adjust their strategies and prepare for a challenging market ahead (see deal highlights and market observations in Vietnam Tech in the News).
Zooming in on AVV, one of our popular activities last month was a social event in Saigon where our portfolio met and discussed hiring best practices with Bryan Pelz, a 14-time entrepreneur with over 2 decades of experience in building and managing startup teams in Vietnam. We also recently wrapped up an annual summit in Phu Quoc for our growing team of 14 where we realized how much we love our jobs and each other! Check out the Spotlight section for some key learnings and learn what else we have been up to in AVV in Action.
Until next time,
The Ascent
Vietnam Tech in the News
1. Late-stage fintech fundings.
- In late April, Trusting Social (AI-powered credit scoring platform) announced its $65M series C initial close from local consumer conglomerate Masan Group
- Consumer investment app Finhay is said to have raised $25M from Openspace Ventures and Vietnam Investment Group
- Southeast Asian MSME lender Funding Societies hosted its official launch in Vietnam. This follows its latest $144M funding round led by Softbank.
2. Early-stage impact startups attract funding from regional investors. In last year’s Dream Incubator DI-gest Asia Market Report, our GP Binh Tran remarks, “We are seeing more and more startups in Vietnam leverage data and technology to address them [emerging market problems] and in turn, generate great impact.” In line with that observation, a number of local early-stage impact startups have raised early-stage funding.
- Dat Bike, Vietnam’s first domestic e-bike creator, raised $3.5M financing in its Series A led by Jungle Ventures
- Equo, sustainability startup specializing in producing plastics alternatives, raised a $1.3M seed round led by Nextgen Ventures
- Koina, an agritech supply chain startup also announced that it received an investment from Glife Technologies Pte Ltd.
3. Other notable deals
- D2C menswear brand Coolmate raised a $2M Series A round led by Access Ventures
- Singapore-based Eureka Robotics (robotics and automation technology startup) recently closed a $4.5M pre-seed round led by the University of Tokyo Edge Capital Partners.
4. Public Market Correction. In the past few weeks, we’ve seen a myriad of VCs send out memos to their portfolio companies in response to macroeconomic events. Sequoia, whose memos are most well-known, recently developed a deck named “Adapting to Endure”, which follows its previous memo, “Coronavirus: The Black Swan of 2020” and the first legendary memo, “RIP Good Times” during the Global Financial Crisis of 2008.
These messages contain the same rhetoric of capital becoming scarce, the need to extend runways, and a long road to recovery. This is prudent advice from one of the top VCs in the world. Interestingly, this is the first market downturn for the tech ecosystems in Vietnam and Southeast Asia. Perhaps the road to recovery won’t be as long as one might expect. While we’ve seen tech disruption across all industries in developed markets, that level of disruption is just beginning in Vietnam and the region. Tech adoption across all industries is inevitable here, creating exciting opportunities for the great founders that exist through good times and bad.
Historically during market downturns, generational companies are born. Investment terms tend to swing towards the investor and companies are forced to improve capital efficiency. As fewer companies are able to raise capital, the best companies rise to the top. The market downturn also opens up an opportunity for funded startups to acquire talent more easily as hiring freezes are implemented and unfortunate layoffs begin to increase in frequency. Also, as the value of employee's options at large public companies shrinks significantly, they begin thinking about opportunity costs, and many jump ship to start their own companies or join earlier stage startups.
While we’re saddened by the millions of people who have seen their savings shrink and the many who will lose their jobs, there are still plenty of sectors where technology and innovation have yet to positively transform the lives of those in Southeast Asia. Seed stage startups are many years away from reaching scale so are somewhat insulated from market gyrations. We are ready to invest and will continue to deploy capital through this downturn.
Spotlight
Early-stage startups: How to find the best talent and build an A-team
Hiring a great team is essential for building a great startup, regardless of sector or market. However, in today’s world of lofty job-seeker expectations and fierce competition for skilled workers, it is no easy feat, especially for resource-constrained, early-stage startups.
To help founders answer burning questions about hiring, we sat down with Bryan Pelz, founding CEO of VNG & experienced board member of FPT Software, VNG, Vietnamworks, and Pizza 4Ps, and discussed how startups can hire the best talents and build an A-team.
Read the full story linked below to see how self-awareness, flexible problem solvers, and “stalking” can build A-teams.
AVV in Action
1. Continuing to build up a strong founder community in Ho Chi Minh City. Our Hiring AMA with Bryan Pelz in April was also a social event for our portfolio companies. It was a lovely occasion for our founders to meet, exchange ideas, learn from each other, and explore opportunities to partner up. Big applause to Bryan for his valuable sharing and special thanks to our founders who took time from their busy startup life to join our event.
2. Sharing perspectives on private investing in Vietnam with German entrepreneurs. Our GP Binh Tran participated in the German Business Association’s monthly meeting to share his perspective on investment trends and opportunities in Vietnam’s private investors. It was a great evening filled with entrepreneurial energy, fresh ideas, and insights. We look forward to contributing to future events promoting Vietnam by our partners and friends.
3. Mock Investment Committee (IC) for Fulbright students. On May 9, Investment Associate Minh Ta joined a Mock IC for undergrad students at Fulbright University as a guest instructor. “It was great to see Fulbright students’ strong analytical skills. I was impressed by the quality of their work despite their limited access to some key deal information”, Minh shared. Special thanks to Fulbright University for giving us the opportunity to meet and support their students (and hopefully future VC & tech talent.) Pop over to Linkedin and Facebook to stay on top of our latest thoughts and events.
4. AVV Annual Summit in Phu Quoc. The 14 of us spent a few days in Phu Quoc, learning more about our mission, each other, and ourselves. Tears were shed, hugs were shared, and glasses were raised. We left Phu Quoc energized, resolute, and feeling privileged that we actually get paid to do what we love. If you know somebody who needs to be at the intersection of innovation and finance in Vietnam, we’re hiring!
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