Ascend Vietnam Ventures general partners Binh Tran and Eddie Thai (R)
Binh Tran and Eddie Thai, the general partners of 500 Startups Vietnam, have joined hands together to launch a new VC firm targeting local seed-stage startups.
Christened Ascend Vietnam Ventures (AVV), it will invest between US$500,000 and US$2 million each in 25 startups over the next three years — a third of which will also receive follow-on investment of up to US$4 million each.
“We are open to taking a look at anything tech or tech-enabled, but we do have a prioritisation of sectors this time around,” said Thai, General Partner at AVV.
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Startups operating in sectors such as fintech, edutech, future of work, health-tech, and enterprise SaaS will get the first priority. Priority 2 sectors are supply chain & logistics, manufacturing & robotics, agritech, e-sports & gaming, and managed marketplaces & retail enablers.
Although Thai and Tan will spend majority of their time at AVV, the duo will still continue to support 500 Startups’s portfolio companies/ founders and look to maximise returns to their investors.
“Binh and I will continue to steward 500 Startups Vietnam but will be spending the majority of our time going forward on the new firm. Besides the two of us, all other personnel will be dedicated to one or the other,” he said.
Will 500 and AVV complement each other? “500 Startups Vietnam will be fully deployed before AVV invests. So there will not be considerations of co-investment. However, AVV will be interested to investing in some of 500’s best companies, should the opportunity arise (and subject to advisory committee clearance),” Thai elaborated.
To a question on why there is a need for a new seed VC firm in Vietnam, Thai said: “If one were to look only at raw gunpowder, it might be said that there is ‘enough’ seed capital available (in Vietnam). But as we know by now, it’s not enough for founders to simply see that there is money around.”
The right founders have to be able to access the right amount of capital at the right time but that’s just not happening, he said. Due to differences in experience and market knowledge, etc., there are still all kinds of capital market inefficiencies in the early-stage financing space.
“Beyond that, founders could use robust support from their investors to help ensure that they build strong foundations for the long term. But they don’t always get that support either,” Thai explained.
According to Thai, when the duo first considered launching 500 Startups Vietnam, the startup landscape in Vietnam was completely different from what it is today. Back then, tech startup founders were few and far between, toiling away with limited resources or guidance.
There were just a handful of early-stage investors in a tech ecosystem where terms like convertible notes, minimum viable products, and cap tables were foreign.
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“To give a sense of how young the ecosystem was, the total amount of venture capital invested in Vietnam in 2017 was US$48 million, a minuscule amount for a country of almost 100 million people. Fast forward just two years later to 2019 and that number has approached US$1 billion,” he said.
“Startups like ELSA, Trusting Social, Axie Infinity, and Earable have attracted global investors such as Sequoia, Founders Fund, Gradient (Google’s AI-focused fund), and Mark Cuban,” he noted.
For the past three decades, Vietnam has been the fastest growing market in Southeast Asia and is forecast to continue to play a critical role in the region for years to come.
“We believe that Vietnam in the near future will be a new tech capital. Rather than take a protectionist stance, Vietnam’s openness to global players creates a competitive environment forcing tech founders to be scrappier, data focused, and more open to international collaboration and expansion,” he pointed out.
Meanwhile, local and foreign founders alike find themselves in an attractive and accessible place with a low cost of living, a safe and stable society, and a large and affordable talent pool with some of the best engineers in Southeast Asia.
In addition, many of the problems, spending capabilities, and behaviours of consumers and SMEs that exist in Vietnam are likely to be found also in emerging markets across Asia Pacific and beyond.
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Asked where he sees the country’s startup ecosystem in the next five years, Tan said: “What has happened in Vietnam since we announced 500 Startups in 2016 indeed shows how much is possible in a fairly short span of time (and with relatively few resources compared to other countries in Southeast Asia).”
“Even so, we’re thinking in decades, not days, and on that horizon, there is little doubt in my mind that Vietnam can be a global tech hub. Different people can make different prognostications about what hub will be larger or grow faster than which other one, but the bottom line is that there is much that can be done to improve the human condition, and I believe Vietnam will inevitably be a part of that,” Thai elaborated.
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Image Credit: Ascend Vietnam Ventures
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