|The five winners of the first batch of Grab Ventures Ignite 2020 |
According to StartupBlink, the Vietnam startup ecosystem scooped up 25th position in Asia-Pacific and 59th globally in the ranking of 100 economies with the best startup ecosystems in 2020. Among them, Hanoi has made the top 200, while Ho Chi Minh City made its debut at 225.
Riding on this achievement, Vietnam aims to have five billion-dollar tech firms by 2025 and 10 by 2030 as part of its plans for Industry 4.0 adoption. However, it remains a daunting task for Vietnam to achieve the target.
According to many experts, Vietnam is one of the leading startup nations in terms of quantity. One particular strength of the local ecosystem is that young people can quickly start up a business with a good idea, suitable technology, and product development strategy. However, the ecosystem still lacks unicorns and startups with over $200 million valuation. After years of booming, local startups start to find it hard to raise funds.
A new report by Do Ventures pointed out that in 2019, Vietnam’s startups managed to bag $861 million in investment from a total of 123 venture deals. In the first half of 2020, investment proceeds in Vietnam dropped by 22 per cent to $222 million.
The decline is mainly attributed to the impact of the ongoing pandemic – however, the crisis also revealed weak points of Vietnamese startups. Despite having raised millions of US dollars, such startups have faced struggles during this time, and some founders even had to leave startups altogether despite the tremendous efforts and time taken to build them.
Nguyen Thai Hai Van, managing director of Grab Vietnam, said that the biggest challenge for Vietnamese startups is to raise capital. It does not lie in the shortage of capital or investor interest but the lack of ability and vision of founders. Vietnamese startup founders are good at finding ideas, Van said, but they are still struggling with the implementation process which requires leadership, talent attraction, system development, and management skills.
It means the Vietnamese startups need to be equipped with underlying knowledge, experience, and expertise to receive a pre-seed or seed funding. From there, startups can also continue growing their business to raise funding in Series A, Series B, and Series C rounds. Ultimately, they can realise their dream to become unicorns. By focusing on quality rather than quantity, the Vietnamese startup ecosystem can gear up towards sustainable development.
To help startups address these challenges, Grab launched Grab Ventures Ignite, an accelerator programme for early-stage startups in Vietnam as part of its “Grab for Good” development roadmap. After nearly seven months, the first batch of Grab Ventures Ignite attracted over 300 startups operating in 10 different industries from seven countries across the region.
During the programme, startups have received access to professional training and mentorship by experts from Grab and its programme partners. The startups learn strategies on how to drive growth, raise funds, manage human resources, and develop technology foundation as well as improve marketing and sales activities.
Most recently, Grab Ventures Ignite 2020 has found five successful startup models – bePOS, Vbee, Stringee, Papaya, and GoDee – operating in the fields of retail, insurance, logistics, and communication.
Vbee is the first local startup specialising in AI voice solutions. A representative of Vbee said that it has learned many useful lessons and best practices from Grab. The most memorable lesson from the initiative is to think big and dream bigger than the initial narrow vision.
“After discussing and consulting with the Grab team, we realised that our platform can develop in Southeast Asian countries, which have similar language characteristics like the Vietnamese,” he said.
Likewise, bePOS is a super point-of-sale platform that empowers small- and medium-sized enterprises in Southeast Asia. At present, bePOS is serving clients like coffee and spa chains across 15 countries.
“Grab Ventures Ignite helps us to outline a blueprint and evaluate feasible ideas for implementation,” the bePOS representative said. “We have not only gained valuable experiences from the programme, but also received many useful and constructive advice from Grab’s senior management team. This has been a rare experience for us.”