Foreign Venture Funds Flock to Vietnam

Tuan Minh

14:12 19/10/2015

BizLIVE - Overseas venture funds have driven attention to startups in Vietnam, which has seen rapid economic growth driven by rising consumer demand and exports.

Foreign Venture Funds Flock to Vietnam

Vietnamese startups have attracted large funding from foreign investors. (Photo: Internet)

Café chain KAfe Group Limited has raised $5.5 million from Cassia Investments, a private equity firm that invests in consumer-focused lower middle-market companies across Greater China and Southeast Asia, making it one of the largest funding rounds in the Vietnamese startup community.
The funding round, which was also participated by institutional investors from London and Hong Kong, will help KAfe Group expand beyond Hanoi to Ho Chi Minh City and other major cities in Vietnam.
KAfe Group, which has 12 outlets Hanoi, has recently set its footprint in Ho Chi Minh City, where it operates four outlets. The chain aims to bring the total number of outlets to 26 by the end of the year.
New York-based Tiger Global Management has stepped in Foody, another food startup major in Vietnam, part of its plan to expand to the populous Indonesia., a Vietnamese e-commerce startup selling goods for moms and babies, earlier this month closed a $228,000 seed funding round led by Swiss Founders Fund. The fundraising is supported by Binh Tran, former co-founder of social marketing platform Klout, and Eddie Thai, a local startup advisor, together with an international syndicate of angel investors, according to the Deal Street Asia. was set up in 2013 to meet growing demand for products of babies as Vietnam has a young growing population exceeding 90 million people, with 1.5 million babies born every year. About 64% of the population is aged under 35.
In addition to the consumer goods sector, OnOnPay, a smartphone-based payment platform, has welcomed an investment of over $100,000 from Singapore’s Captii Ventures.
Silicon Valley-based accelerator and venture capital fund 500 Startups, which has invested in four Vietnamese startups namely Tappy, Babbyme, Ticketbox and, has hinted that it plans to raise the number of investee companies to 20 in the coming two years.
The Thoi Bao Ngan Hang (Banking Times) newspaper cited an industry analyst as saying that venture funds could pour up to $1 billion into Vietnam in the upcoming years if things go well.
Meanwhile, FPT Corp, the largest software producer in Vietnam, has established a venture fund with a target of disbursing $3 million per year for startups.
Mekong Capital is a well-known story of success for investing in Vietnamese startups. Its divestment from Golden Gate JSC, one of the leading restaurant chain operators in Vietnam, in 2014 resulted in a net return multiple of 9.1x and a gross IRR of 45.1% on the. It also book high returns from the partial exit from Mobile World Investment Corp. (MWG), Vietnam’s biggest mobile phone retailer.