Logivan truck
Logivan’s founder Linh Pham got the idea for her business after observing the inefficiency of the trucking market at her family’s fertiliser business in Ho Chi Minh City © Logivan
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Vietnamese companies in sectors ranging from trucking to fintech and facial recognition are attracting a record wave of venture capital money, drawn in by the digital transformation and growing wealth of one of Asia’s youngest and fastest growing economies. 

The country is making headway in the south-east Asian nations’ race to build their first “unicorns”, fund managers say. Such companies, with valuations of $1bn or more, gain the attention of foreign investors and help sustain a bigger venture scene. 

The numbers show investments into Vietnam are growing in size and total amount. The country saw 24 deals worth $128m in the first half of this year, up from six transactions worth $12m in the same period a year ago, according to Asian Venture Capital Journal, a trade publication. 

Among the Vietnamese companies that have drawn significant interest from regional and international investors recently are FastGo, a lower cost rival to south-east Asian ride-sharing company Grab; Abivin, which organises logistics for Vietnamese enterprises; and Logivan, sometimes described as an “Uber of trucking”. 

“When we started 15 years ago, we were one of the few [private, start-up] companies,” Le Hong Ming, said co-founder and chief executive of gaming and media company VNG, Vietnam’s first unicorn. “Now there are hundreds and hundreds.” 

VNG, which is relatively unknown outside Vietnam but comparable in its domestic reach to China’s Tencent, started out in online gaming and has expanded into news, payments, cloud computing and mobile messaging.

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The company was valued at an estimated $2.2bn in its most recent fundraising, led by a unit of Singapore’s Temasek. VNG in 2017 signed an understanding with Nasdaq to pursue an initial public offer on the exchange, but has not yet done so, said Mr Ming, because of regulatory issues in Vietnam. 

Payments start-up VNPay is also poised to enter the ranks of Vietnamese unicorns, DealStreetAsia reported this week, with a proposed fundraising of up to $300m from SoftBank Vision Fund and GIC, Singapore’s sovereign wealth fund. GIC, SoftBank and VNPay all declined to comment.

Regional expansion by Vietnam’s rising companies is one of the big themes Vietnamese and other Asian venture investors are tapping into, along with any business idea that takes advantage of either young consumers or digital transformation. 

“Vietnamese companies going regional is one of the themes we look at,” said Don Lam, chief executive of VinaCapital, which launched a $100m venture capital fund dedicated to Vietnam last year, its second. “When we invest in Vietnam, we want companies to be able to say they can compete regionally, and hopefully globally one day.” 

VinaCapital Ventures’ portfolio includes investments in Logivan, FastGo, and Wee Digital, a biometric and facial recognition company that recently signed a contract with Vietnam’s biggest conglomerate Vingroup to install its products at hotels and resorts. 

Many of the start-ups are being founded by returning members of the Vietnamese diaspora, or locals who worked or studied abroad before returning home to start companies. 

“Vietnam has reverse brain drain. In a lot of countries, the best and brightest go to school abroad and stay there,” said Justin Nguyen, who heads Monk’s Hill Ventures, a VC fund focused on south-east Asia. “We have people returning from the US who went to school there, or people like me who left as children, bringing back the rich experience from abroad.” 

Logivan’s founder Linh Pham is a University of Cambridge graduate and former Goldman Sachs analyst who got the idea for her business after observing the inefficiency of the trucking market at her family’s fertiliser business in Ho Chi Minh City. 

She founded Logivan, which connects cargo owners with truck owner-operators, in 2017. Since last year, the company has raised nearly $8m from investors including Singapore-based Insignia Venture Partners and VinaCapital Ventures.

With nearly 100m people, Vietnam is one of south-east Asia’s largest countries, but still lags in critical mass behind Indonesia, its most populous, or Singapore, its richest. 

Oliver Rippel, co-founder of Asia Partners, a new Singapore-based private equity firm that is raising its first fund targeting south-east Asian tech, said Vietnam would not be the first place to look for deal sourcing, compared to either Indonesia — which has produced four unicorns, including regional ride-hailing company Go-Jek and travel website Traveloka — or Singapore. 

“So far the proof has not been in the pudding in terms of Vietnamese companies expanding outside of the country and into the region,” he said. “Singapore and Jakarta are the two main hubs we would look at,” he said, adding that Vietnam remained “a very important puzzle piece in south-east Asia”. 

In establishing its first $1bn-plus unicorns, Vietnam is pulling ahead of Thailand, its more developed regional neighbour, which has yet to produce one. Still, investors are waiting for more. “You are going to need billion-dollar companies to make venture economics work,” said Monk Hill’s Mr Nguyen.

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