Despite the hardship brought about by COVID-19, Vietnam is becoming ever more capital-attracting. 2020’s difficulties have barely stopped venture capital activity in the country. In fact, the total value of investments poured into Vietnamese startups in Q1 2021 reached more than US$100 million, increasing by about 34 per cent YoY with foreign investors being dominant, as reported by South Korean venture capital firm Nextrans. 

Emerging from the pandemic while other countries are still in the midst of the crisis is giving Vietnam an advantage. The country’s startup ecosystem has been transformed from the second-least active to the third-most active among ASEAN countries, trailing only Indonesia and Singapore.

Also, profiles of investors making deals in Vietnam are increasingly diversified. If the majority of deals were from Singapore and Japan back in the 2017-2018 period, the market now is extremely vibrant with the participation of several investors from different parts of the world such as South Korea, China, even the Europe, Middle East, and Africa (EMEA) region. Many of them have made investments in Vietnam for the first time. Local investors are also active, participating in roughly 30 per cent of deals.

Among the Vietnamese startups that have drawn significant interest from regional and international investors recently is Loship. Recently, Vietnam’s one-hour delivery startup Loship has announced its latest investment from Skype cofounder backed MetaPlanet Holdings.

This is MetaPlanet’s debut investment in Vietnam, as part of its strategy to capture the emerging market opportunities in Asia. “MetaPlanet is planning to pay more attention to the rapidly growing economies in Southeast Asia. I’m delighted to be off to a strong start in Vietnam by adding Loship as our first portfolio company there,” said Jann Tallinn, Skype cofounder, Partner of MetaPlanet Holdings in a statement.

Loship is also backed by a diverse range of international investors including Smilegate Investment (South Korea), Golden Gate Ventures, Vulpes Investment Management (Singapore), DAAL Ventures and Wealth Well (Saudi Arabia), Eucagi Ventures (Nigeria), to name a few. 

This is great validation that many venture capitalists from the Middle East and Africa region are starting to shift attention and make deals in Vietnam.

Also Read: EQuest raises funding from KKR to make education accessible for Vietnam’s students

Vietnam’s startup scene is on the cusp of something big and is likely to replace Indonesia to become the next favourite destination of foreign investors. “It’s now the time for investors to set foot in the Vietnamese market,” affirmed Le Han Hue Tam, General Manager of Nextrans Vietnam.

Other notable deals in Vietnam included a US$2.6 million investment led by Singapore VC firm Jungle Ventures in electric motorbike brand Dat Bike, and MoMo’s series D funding round with the participation of Warburg Pincus, Affirma Capital, and Tybourne Capital Management.

In addition, Vietnamese flexible pay startup Nano raised a US$3M seed round led by Golden Gate Ventures and Venturra Discovery.

Social commerce startup Mio raised a US$1 million seed funding round led by Golden Gate Ventures and Venturra Discovery. English learning app ELSA wrapped up a US$$15 million investment in financing rounds co-led by Vietnam Investments Group and SIG. 

What’s behind the boom?

Several factors are likely to contribute to the boom period of venture capital activity in Vietnam:

Successful containment of COVID-19

Vietnam has undoubtedly shown strength and stability in weathering the COVID-19 storm, offering a successful example of how a developing country can fight against the pandemic. Despite the gloomy global market, Vietnam’s prospects for recovery look bright as businesses resume operations, and consumers flock to restaurants and shops.

Sustained economic growth

Vietnam’s economy has been rapidly growing at an unprecedented rate, with the forecasted GDP growth rate of 6.3 per cent in 2021 (according to KPMG). Also, the economy is dominated by a young and tech-savvy population, which is embracing the mobile internet economy as a norm in their daily lives. Not to mention, Vietnam is the sole economy in ASEAN not forecast to tip into recession this year.

Government-led initiatives

The immeasurable efforts of the Vietnamese government have also contributed a great deal to Vietnam’s thriving startup ecosystem. Numerous government-backed measures and stimulus efforts have been established to support startups, with former Prime Minister Nguyen Xuan Phuc approving the National Digital Transformation Program in June 2020, or the recently implemented EU-Vietnam Free Trade Agreement and the EU-Vietnam Investment Protection Agreement. These efforts have significantly paved the way for greater investment inflow to the country.

Also Read: How Vietnamese startups are braving the COVID-19 pandemic

High entrepreneurial spirit

In addition to these macro trends, the entrepreneurial spirit of the Vietnamese people is noteworthy, and this spirit has been demonstrated even more strongly and clearly in times of crisis.

“Nowhere else in the region can you find as much drive, spirit, and enthusiasm from young people to start their businesses from scratch. Vietnamese people are hungry for entrepreneurship and innovation, and the influx of returnees from overseas is helping improve the quality of the startup ecosystem,” Loship CEO Trung Hoang Nguyen further shared.

What lies ahead

All of the aforementioned ingredients have helped Vietnam survive and thrive in this new rapidly emerging world. It is expected that 117-200 deals will be made in the next 12 months. The so-called “hot” sectors are likely to be fintech, e-commerce, and logistics.

On another note, the local government has set the ambitious goals of having at least 10 unicorns over the next decade and becoming a technology startup centre in Southeast Asia. 

Vietnamese startups who are able to future-proof their business models, harness digital technologies, and provide relevant opportunities and solutions will be best positioned to produce solid returns and attract a greater number of seasoned investors in the time to come.

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Food waste is a colossal problem. It damages global economic and environmental resources.

Globally, one out of nine people has no access to food. This is alarming, considering that one-third of all the food produced is lost or wasted every year.

Besides, the wastage of food comes with a huge price, as it consequently results in hiking the food prices. Then there is loss of land, water, and biodiversity, in addition to the negative impacts of climate change.

Things are appalling in Southeast Asia as well. In Singapore, the amount of food waste generated has grown by about 20 per cent over the last 10 years. In 2019 alone, the city-state generated around 744 million kg of food waste, which is equivalent to two bowls of rice per person per day, or around 51,000 double-decker buses.

Indonesia wastes about 300 kilograms of food per person every year, making it among the largest food wasters in the world, Economist Intelligence Unit (EIU) data revealed.

According to SWCorp Malaysia (Solid Waste and Public Cleansing Management Corporation), about 16,667.5 tonnes of food waste is generated in Malaysia daily.

Also Read: MAEKO addresses climate change by converting food waste into compost. Greta Thunberg should feel happy

In Vietnam, 87 per cent of the households admitted that they waste two plates of food per week on average. In Ho Chi Minh City alone, food waste accounts for more than 60 per cent of the city’s 8,300 tons of solid waste per day.

In Metro Manila, the Philippines, it is estimated that over 2,000 tons of food are wasted daily and about 308,000 tons of rice are wasted annually.

Tackling this crisis is crucial for addressing global hunger and saving the planet. As per Food and Agriculture Ognanization of the UN, food wastage reduction would not only avoid pressure on scarce natural resources but also decrease the need to raise food production by 60 per cent to meet the 2050 population demand.

The role of tech

According to London-based Aquaa Partners, tech and tech-driven business models have huge potential in reducing food wastage across the value chain. They can deliver a high return on investment for both traditional and foodtech companies.

In many countries, food waste management is handled by governments. But the gravity of the issue is such that mere government-level efforts are inadequate.

Of late, several entrepreneurs have given serious attention to this problem, and they have come up with innovative tech solutions.

There are mainly three broad categories in food waste management: food waste prevention, food redistribution, and food waste recycling.

1: Food waste prevention

It refers to the prevention of food waste before it happens. Essentially, companies working in this space try to help restaurants/hotels/eateries prevent and minimise food waste from being generated.

Singapore-based Lumitics is one such startup. Its solution empowers chefs with visibility on their food waste as a feedback loop, so that they can take the necessary steps to reduce it. The solution comprises image recognition, AI, and data analytics to provide meaningful and useful insights into what is being thrown away.

Manila-based Mosaic Software is also operating in this vertical, although its core mission is not food waste management. Mosaic works in the background to help prevent the problem that leads to food waste. Its purchasing system makes sure that orders for food are placed only when the inventory drops to a designated level.

2: Food redistribution

There are many tech and non-tech companies and charity organisations around the world that take surplus food from restaurants and hotels and redistribute it to the needy.

Singapore-based TreeDots offers a B2B platform that allows suppliers to redistribute their unsold inventory to organisations that can use them. By doing so, suppliers gain from salvaging value off their unsold inventory, and buyers get quality ingredients at lower prices.

TreeDots serves a range of food service operators such as restaurants, caterers, cafes, hotels, and central kitchens.

UglyFood is another local startup working in the redistribution space. It sells excess produce (fruits and vegetables) and creates awareness against food waste in a fun and light-hearted way.

In addition, it offers a multiplayer puzzle game, Uglyfood Matchwars, which teaches players the difference between perfect, ugly/blemished and spoiled food products.

In Indonesia, there is a youth movement, called Garda Pangan, which is focused on food waste eradication and hunger relief. Its activities include food rescue from restaurants, bakeries, and hotels; food donation boxes; fruit and vegetable gleaning from farms; and education about food waste and its effects.

Also Read: UglyFood in talks to raise up to US$1M seed funding, looks to close the round by Aug

In Malaysia there is Grub Cycle. It is a social supermarket that allows anyone to purchase groceries, pastries and perishable food that are typically removed from shelves due to being close to expiry, damaged packaging or unique in appearance — all at a bargain price.

3: Food waste recycling

Food waste generated by households, restaurants, and corporations mostly end up in landfills, and its decomposition contributes to greenhouse gas emission, which can harm our environment.

Some companies have found a way to address this issue by converting food waste into compost and energy.

Malaysia’s MAEKO converts food waste into bio-organic compost for agriculture. This way, it allows food waste that comes from the farms to go back to the farms as fertiliser for future food.

Singaporean startup TRIA has developed Bio24 to convert food packaging and waste into compost within twenty-four hours.

Flavorgator is another player. It offers a food rating app that tackles the issue of food waste by nailing down what dishes are disliked on menus.

Hosokawa Micron, based in Malaysia, converts food waste into compost. It also processes the waste with its size reduction machine and uses processed waste material in the biogas plant.

VCs are noticing

Of late, venture capitalists have started pouring money into the sector. During the 2018-2021 period, about US$1.4 billion was invested in food waste management startups around the world, according to Aquaa Partners.

But this amount is paltry when compared with the billions of dollars pouring into other food-tech verticals, such as food delivery and cloud kitchen.

Industry experts say that there is a lot of investor appetite in the food space around the world at the moment.

“Food waste is a trillion-dollar problem. Generally, there’s an economic opportunity when you solve a big problem,” said Nicholas Cocks, MD of Velocity Ventures, a hospitality- and travel-focused VC firm and investor in Lumitics. “When there’s a big problem, investment money will naturally flow and I think we’ll certainly see it in the future.”

Besides this, sustainability as an investment trend is popular at the moment and that will accelerate the capital flow into the vertical.

“Number 2 in UN’s second goal in Sustainability Development Goals (SDGs) is addressing hunger, which is a key issue around food wastage. These two are interconnected and are getting investors’ attention,” he said.

Disparity in regulations and enforcement a challenge

Food waste management is a heavily regulated sector and is often handled by government contracts. Waste disposal often takes place at government-run facilities. That is the case across Southeast Asia and around the world.

Because of governments’ involvement in the sector, they have a huge opportunity to drive outcomes. When they control illegal food waste disposal and tax and price it to drive recycling, sustainability and waste reduction outcomes, then there is an opportunity.

If the disposal costs nothing, then people will just dump their waste on the streets. It is hard to build a business around recycling and waste reduction when the cost is zero.

If the cost is high, then the economic incentive for waste generators is very high to introduce new solutions and reduce their cost of waste.

“Regulations and the enforcement are very disparate across the region. We would like the government to increase the cost of disposal through taxation and other levies to encourage recycling and waste reduction, and we’d also like to see stronger enforcement of these regulations,” elaborated Cocks.

The COVID-19 pandemic has also been a challenge, with many hotels remaining closed and flights grounded. This means the food waste generation is low. “Last year was challenging for us because pretty much all our clients had to close their businesses,” said Loi. “But we are starting to see quite a bit of recovery.”

Sustainability reporting is trending

Over the last couple of years, hotels have started thinking harder about food waste reduction. The COVID-19 pandemic has further accelerated this.

“Hotels are highly incentivised to do that because when they reduce the amount of food waste generated, they reduce their food costs and at the same time become more sustainable,” said Loi. “That is a big trend we’ve been seeing.”

Many organisations in Asia have also started doing sustainability reporting. They include hotel chains and airlines. Customers are also pressuring companies to do sustainability reporting.

Also Read: Why corporates need startups to shape the future of food solutions

“Some of our partners and customers, who run large conventions and exhibitions, have now started asking for impact reports. They want to know how much food was wasted, how much plastic was used, and also about the carbon footprint generated from the events,” Loi pointed out.

“So, hotels are also starting to realise that for them to be able to meet those requirements, they need solutions to help them track those things well. We have been able to show them that we already have a food waste reduction framework in place,” the Lumitics CEO said.

What is the future?

With the rich-poor divide widening globally, the number of people going to bed with an empty stomach has been on the rise. Global warming and climate change are also accelerating at an alarming pace. Wastage of food globally, colossal in nature and costing billions of dollars to the world economy, not only pushes more people to destitution and poverty but is also destroying the planet. And both are posing a huge threat to humanity.

The gravity of the crisis suggests that there is huge potential for thousands of food waste management companies, especially in Asia, Africa, and Latin America.

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Main photo by Jasmin Sessler on Unsplash

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These startups have an appetite for tackling food waste and hunger in Southeast Asia; Here’s an in-depth article about the three different categories of food waste management in SEA — food waste prevention, food redistribution, and food waste recycling.

Flash Express becomes Thailand’s first unicorn after raising US$150M; Investors include SCB10X, Buer Capital, eWTP Capital, TCP Group’s Durbell, Krungsri Finnovate; The group will use the fresh capital for tech development and expansion into Cambodia, Laos, Myanmar, and Vietnam.

The leading Asian tech players eyeing an IPO in 2021; Asian firms are increasingly opting for IPOs as tech stocks boomed amid the pandemic; Tech in Asia’s analysis shows that 40 tech startups across China, India, and Southeast Asia are reportedly planning for an IPO this year; Out of this number, 22 startups could collectively raise over US$26.78B.

iGlobe Partners closes new US$100M fund; iGlobe Platinum Fund III invests in startups innovating in smart cities, synthetic biology and fintech; It mainly targets pre-Series A to Series C stages firms; The ticket size is between US$500K and US$10M.

Zenyum raises US$40M Series B to accelerate expansion in Asia, deepen product offerings; On this, US$25M came from L Catterton; Zenyum partners with dentists to provide 3D-printed Invisible Braces across seven markets in Asia; In Nov 2019, it raised US$13.6M Series A.

Good Startup launches US$25M fund to invest in alternative protein ventures in SEA; The cross-border VC fund is an investor in Eat Just, TurtleTree Labs, and Avant Meats; It aims to invest in a total of 32 companies.

P2P lender Amartha raises US$7.5M from Norway wealth fund Norfund; The corpus will be distributed as a capital loan to women micro-entrepreneurs in rural areas; Since inception, Amartha has reportedly disbursed loans worth over US$250M to 678,502 women borrowers across 18,9000 villages in Indonesia

EQuest raises funding from KKR to make education accessible for Vietnam’s students; EQuest is focussed on four core segments — K-12 bilingual schools, tertiary institutions, English enrichment courses, and digital learning; EQuest claims to have more than 110,000 students enrolled across its segments each year.

Indonesian P2P lenders face an existential threat as COVID reshapes finance; More than 2 dozen companies are no longer able to operate since the start of 2020; Plus, they are facing a growing challenge from the rise of digital banks that offer far lower interest rates.

Singapore’ GIC leads US$50mn Series C of Locus; It will majorly use the funds for improving geographical reach and building its research and development team to expand the product line; Locus uses deep machine learning and proprietary algorithms to offer smart supply chain solutions to customers.

Deals of less than US$500K up but later-stage deals down in Vietnam in 2020, says Report; The total capital invested decreased by 48% to US$451M in 2020, reveals a study jointly conducted by Do Ventures and NIC; The investments of US$10-50M were the worst hit with a significant 60% fall in the number of deals, followed by a 42% drop in US$3-10M deals.

Red Dot Analytics raises seed funding round; Investors include IMO Ventures, Avior Capital, GSR Ventures; Red Dot Analytics builds AI-driven digital twin solution that helps transform data centre operations and management.

How could you accelerate your fundraising efforts through thought leadership articles; Putting down your own thoughts and words will make it easier for you to take it to investors and establish greater credibility; The added validation to your ideas from other founders and professionals in the community will serve as a great endorsement to your ideas.

Line to roll out digital banking platform in Indonesia; This follows a partnership signed in 2018 between Line and Bank KEB Hana Indonesia, a subsidiary of South Korea’s Hana ZBank; Line had announced the acquisition of a 20% stake in KEB Hana.

Malaysia’s Axiata and RHB Bank team up for digital bank license; A consortium of Axiata’s e-wallet company Boost Holdings and RHB will be formalised with a 60:40 shareholding, respectively; Malaysia’s banking industry has between US$969B and US$1.2B in terms of total assets.

‘Diversity and inclusion aren’t getting enough airtime in SEA’s workplaces’; An interview with Andee Chua, a culture builder at HubSpot and co-founder of Kampung Collective, a community for community builders across Asia.

Reimagining customer engagement for the AI bank of the future; If fully integrated, AT technologies can strengthen engagement significantly, supporting customers’ financial activities across diverse online and physical contexts with intelligent, highly personalised solutions delivered through an interface that is intuitive, seamless, and fast.

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GIC invests US$50M into Locus

Who is Locus: Locus is a US-based company that automates supply chain decisions. It uses deep machine learning and proprietary algorithms to offer smart supply chain solutions to business customers.

Other investors: Qualcomm Ventures, Tiger Global, Falcon Edge, Amrish Rau, CEO of Pine Labs, Kunal Shah, CEO of Cred, Raju Reddy, founder of Sierra Atlantic, and Deb Deep Sengupta, former President of SAP South Asia.

What the funds will be used for: To improve geographical reach, R&D, and expand its product line.

More on Locus: It claims that its scalable solutions have resulted in over US$150 million savings in logistics costs, 70 million kilometer reductions in distance traveled, and 17 million+ kilograms reduction in GHG emissions for clients across sectors like e-commerce, retail, e-grocery, CPG/FMCG, home services, home deliveries, 3PL, transportation, and B2B distribution.

Also Read: Ecosystem Roundup: SEA’s new Unicorn + food waste management startups

Pakistan’s Tajir raises US$17M

Who is Tajir: A B2B marketplace for mom-and-pop stores.

Investors: Kleiner Perkins (lead), YC Continuity, AAVCF, Fatima Gobi Ventures, Flexport, Golden Gate Ventures, Liberty City Ventures, VentureSouq, CEO of Figma Dylan Field, CEO of Flexport Ryan Petersen.

More on Tajir: Co-founded by brothers Babar and Ismail Khan, Tajir helps mom and pop store owners maintain their inventory. Through the app, users can place orders for inventory, compare the prices of goods, and have access to 24X7 ordering with next-day deliveries.

Co-Creation Fund to back startups solving social issues

The story: Four Japanese companies — namely Japan Airport Terminal, Haneda Future Research Institute, Kiraboshi Bank, ICMG Group — have come together to launch ‘Co-Creation Fund’ to support startups aiming to solve social issues.

Fund size: US$20 million

More about the story: This fund aims to invest in six startups with minimum Series A funding.

In addition to venture investing, this fund will support value co-creation efforts between up-and-coming entrepreneurs and large corporations essential to sustaining social infrastructure.

WEH Ventures launches US$13M fund

More on this: The fund plans to invest in 18-20 early-stage startups and would seek to back them over multiple follow-on rounds.

The fund is sector-agnostic and invests in solutions that are built ground up for solving problems primarily targeting the Indian economy.

The company has already started making investments from its fund. Unbox Robotics, a warehouse automation startup, is one of the first beneficiaries. Others include a DTC brand, a community-first app, and a gaming studio.

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Image Credit: Tajir

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Riskwolf, a Zurich-based insurtech startup with an office in Singapore,  announced today it has completed its first external financing round of 750,000 Swiss francs (over US$800,000).

Led by Swiss business angel network SICTIC, the round was also joined by several unnamed angels and professional investors in Europe, the US and Asia.

Also Read: The future of insurance isn’t just digital — it’s efficiently digital

The startup will use this capital to expand its product line, turbocharge its real-time, data-driven technology platform and accelerate its growth while building out its remote-first team.

Started in 2020, Riskwolf is building a technology platform to deliver customised, parametric insurance to fill this significant protection gap and create innovative, untapped markets for the insurance industry. Its platform is capable of detecting internet outages, modelling the insurance risks and making payouts in real time.

“Riskwolf was founded at the beginning of 2020 to unlock large, innovative insurance markets built on the newly emerging digital economy risks,” said CEO Thomas Krapf, who co-founded the company with CTO René Papesch. “The idea is to bring parametric insurance to any insurer and give them the capabilities to underwrite internet downtimes and outages on a global scale.”

The insurtech firm said in a press note that it is currently piloting its first outage benefit product in Southeast Asia, in partnership with a leading global reinsurer.

Also Read: ‘Microinsurance will play a pivotal role in accelerating financial inclusion in SEA’: Raunak Mehta of Igloo

The team currently has members in Switzerland, Austria, Germany, Slovakia, the UK, Singapore, and India.

Jan Kastory, founding partner and LP at astorya.vc, a Paris-based insurtech VC fund, said: “When claim payouts are pre-agreed, objective and instant, the most ungrateful insurance process suddenly disappears. This is the beauty of parametric insurance. For the underinsured digital economy, the telco and internet outages are only umbrella use cases. Defaulting payment APIs, SaaS companies, telemedicine or e-learning platforms will follow. Riskwolf allows any (re)insurer to enter the space.”

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Image Credit: Riskwolf.

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