Interview: Two Venture Capitalists at the Forefront of Vietnamese Innovation

It is VietnamAdvisors’ mission to rejuvenate the world’s perception of Vietnam.

In the pursuit of that goal, we are proud to present an exclusive interview with both Eddie Thai and Binh Tran – two leading figures of Vietnam’s technological renaissance. Together, they are fundraising for a $10M seed stage venture capital fund to invest in Vietnam-connected startups.

I had the opportunity to pick the brains of both men about Vietnamese startups, entrepreneurial advice, and the future of Vietnam as a startup nation. Enjoy!

What inspired 500 Startups Vietnam?

Eddie: We saw that the massive potential in tech entrepreneurship was finally ready to be unlocked.  We had each been visiting or living in Vietnam for the past several years.  We look at the opportunity through two very different, yet complementary lenses: I through my strategy & finance background, Binh through his deep technology experience. Yet both of us agreed that now is the right time to invest, especially in the seed stage and with 500 Startups as the platform.

Why are your investors interested in Vietnam?

Eddie: It is becoming increasingly difficult for investors to discover and access high-growth opportunities around the world.  Many developed markets have seen stagnant growth and/or higher risk (due to debt overhang,  political instability, etc).  Meanwhile, previously high-growth markets like South Korea and China are seeing signs of slowing down.  On the other hand, Vietnam seems poised for its own tech renaissance.

Binh: Vietnam’s story is a lot like South Korea’s or China’s. Each country overcame conflict and other hardships to eventually achieve high long-term growth, first through low-level manufacturing and then through high-tech manufacturing etc.  Many investors have commented that Vietnam is 20 years behind South Korea and 10 years behind China.

We think Vietnam is positioned to grow as fast if not faster.  Investors are excited about how much Vietnam has matured in the last 4-5 years since the last venture funds were actively investing. You have a young and talented workforce plus a large influx of Vietnamese diaspora starting companies in Vietnam.

Eddie: The investment opportunity should persist for some years.  Some verticals (e.g. logistics, travel, etc.) are still pretty wide open, and even incumbents in areas like e-commerce, media, etc. are vulnerable to disruption.  Meanwhile, we haven’t yet seen a run-up (and bursting) of valuations elsewhere affecting startups in this region.

What startups are you looking to invest in?

Binh: We’re excited about all things tech in Vietnam. Ultimately we’re vertical agnostic, return religious.  That said, we think there’s enormous opportunity in four areas: fintech, logistics, e-commerce, and SaaS/B2B software.

What are some exciting teams that 500 Startups Vietnam has invested in?

Eddie: We’re excited about all 12 teams we’ve invested in or committed to. Many of them are on our website, while a few others are still under wraps.

Binh: One team has reported reaching $5 million in annual run-rate revenue within just a few months of monetization. Another team reached $40K in monthly revenue with >50% m-o-m growth before even raising a seed round. We’re excited about the user and revenue growth that startups in Vietnam can generate. They are just as comparable on both talent and growth as the ones we see in the US with significantly less funding.

You guys joined 500 Startups nearly one year ago. What are some of your biggest lessons learned in your first year?

Binh: The founders we’ve worked with are from a much more diverse set of skills and backgrounds than I had originally anticipated. From being highly technical to design-focused, I’m impressed and proud of the teams we’ve supported. Compared to what Vietnam has seen before, we’re surprised in a good way.

Eddie: But we’ve also seen that there is fierce competition for talent. Given there are so many exciting new opportunities, the best talent are being recruited weekly, much like what happens in Silicon Valley. This is especially true for people with great product-building experience. So we’re helping position our startups to attract and retain the best talent.

What advice do you have for first-time startup entrepreneurs in Vietnam?

Eddie: I would say: you are capable of much more than you think you are.  But to achieve that, you have to aim big, start small, seek advice & fail often (to succeed sooner), and scale fast.

Binh: If you have a great co-founder or team, do whatever you can to keep them. Don’t be afraid to give the space for potential A-players to grow.

What does Vietnam have to do to become the next great tech destination?

Binh: The fundamentals are here: founders, teams, and seed-stage capital are becoming increasingly available.  And where Vietnam has shortcomings there are a lot of people working to fix them.

Eddie: We have been supporting with partners across areas, but our main focus is on what we can do best as 500 Startups: (1) bringing international investment, and (2) driving exits.  Exits are particularly critical: we want to create space for exits like Mobile World (which has reportedly earned its early private equity investor up to 30X return).  There are exciting initiatives in the pipeline that we can’t wait to announce.

Binh: We’d like to see more transparent and investor-friendly rules. Some items include reducing foreign ownership limitations and making it easier to set up a business.

Eddie: There needs to be better infrastructure. Logistics, payments, connectivity. Some great examples of how Vietnam is moving in this direction is the approval of the new Ho Chi Minh City airport with more international links, metro system, and citywide free WiFi coverage.

Binh: Liveability is another big driver of future growth. Making it easier for people to work and get stuff done. A good example is the city of Da Nang. The last time I visited I was impressed by the planning of the city: a futuristic airport and a city with wider roads. It’s one of my favorite cities in Vietnam, based solely on its liveability.

What’s next for 500 Startups Vietnam?

Eddie: 500 Startups has invested in 12 Vietnamese companies in the past 12 months and we want to increase the pace.  We also have several active initiatives already and a huge queue of initiatives lined up to help define best practices and lead the charge for early-stage startups in Vietnam.

Binh: Specifically, we want to train Vietnamese angel investors about tech startup investment, guide to regional tech investors about the Vietnam opportunities, provide resources for founders (such as a library on tips & best practices on product development, growth, and fundraising), and streamline legal work for deals (so that founders can spend less time on legal and more time on building great companies).

Eddie: Last but not least, we also want to help Vietnam’s corporations and SMEs take advantage of the tech revolution by partnering with startups or investing in innovation.