Ho Chi Minh City moves to establish venture capital fund for startups

On March 10, Ho Chi Minh City Department of Science and Technology met with Kairous Capital to discuss venture capital fund models and potential collaboration in drawing international capital for local startups.

The meeting was attended by Tran Trong Tuyen, deputy director of the department, and Joseph Lee, managing partner of Kairous Capital, along with representatives from relevant parties.

Photo: Ho Chi Minh City Department of Science and Technology

During the meeting, Lee expressed Kairous Capital's desire to learn more about the investment environment and the operating model of venture capital funds in Vietnam, particularly the investment mechanisms through funds supporting innovative startups, government policies supporting startups, and the orientations and goals for developing Vietnam's innovation ecosystem over the next 5–10 years.

Tuyen shared Ho Chi Minh City Department of Science and Technology's vision for establishing the Ho Chi Minh City Venture Capital Fund, a new financial instrument aimed at promoting the city's innovation ecosystem. Accordingly, the city currently possesses significant advantages in terms of scientific and technological workers, with nearly 100 universities and training institutions, with numerous students and researchers, creating a foundation for the development of innovative startups.

"Many startups still face difficulties in the early stages due to insufficient access to funding from venture capital funds. The establishment of the city's Venture Capital Fund is expected to support technology projects and innovative startups in overcoming the initial stages, while also attracting additional investment from the private sector," Tuyen said.

The fund is expected to be organised under a public-private partnership model, in which the private sector contributes approximately 60 per cent of the charter capital and the state budget contributes about 40 per cent. The state capital is only allocated after the private sector completes its capital contribution, ensuring market principles. The fund will operate according to market mechanisms, having a board of directors and investment council that includes participation from investors.

Regarding investment orientation, the fund will focus on supporting innovative startups, sci-tech enterprises, and digital technology firms legally established in Vietnam with innovative products and a commitment to operating in Ho Chi Minh City for at least five years. Priority areas include microchips and semiconductors (20-25 per cent); digital technologies such as AI, big data, and blockchain (25-30 per cent); biotech and medtech (15-20 per cent); green technology and new materials (10-15 per cent); and automation and robotics (10-15 per cent).

During the meeting, Lee shared experiences from China and Malaysia in developing venture capital ecosystems, noting the role of state-owned funds in attracting technology, startups, and investment capital. The two sides also discussed fund operations in the region and the factors international investors consider when participating in local investment funds.

"The city is implementing a scheme to establish a venture capital fund with the aim of mobilising financial resources and attracting the support of international investors and organisations," Tuyen said. "Through cooperation and shared experience with international investment funds, we expect the fund to operate effectively, contributing to the selection and support of promising technology projects and startups for future development."

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