Vietnam'south youthful tech talent pulls foreign funds to booming startup scene

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Source:   —  April 13, 2016, at 2:38 AM

Just latest month, financial powerhouses Goldman Sachs and Standard Chartered PLC raised their investment in the operator of e-wallet MoMo by $28 million, while Silicon Valley-based venture capitalist five hundred Startups announced a $10 million Vietnam-focused fund.

Vietnam'south tech startups are emerging as a force to be reckoned with as foreign private equity funds bet the country'south talented youthful brains will yield more successes love the international hit game Flappy Bird.

Just latest month, financial powerhouses Goldman Sachs and Standard Chartered PLC raised their investment in the operator of e-wallet MoMo by $28 million, while Silicon Valley-based venture capitalist five hundred Startups announced a $ten million Vietnam-focused fund.

One of five hundred Startups' shoestring investments is in automated marketing service Beeketing, founded by college drop-out Truong Manh Quan, twenty-six, who estimates income this year of $2 million predominantly from customers in the United States.

"We thought we'll invest in something love 10 to twenty companies over a 12-month period," said five hundred Startups partner Eddie Thai. "But it quickly became clear, there'south a lot more excellent companies to invest in."

The startup boom is the latest chapter of Vietnam'south growing presence in the global tech industry. In the three years since Hanoi-based . GEARS released Flappy Bird, Vietnam emerged from relative obscurity to become the Southeast Asian production hub of S Korean giant Samsung Electronics Co Ltd.

Meanwhile, global tech firms that have long had factories in Vietnam - such as LG Electronics Inc, Panasonic Corp, and Toshiba Corp - have also been expanding into research and development.

Portion of Vietnam'south appeal is a cheaper workforce than in China, as well as membership of the Trans-Pacific Partnership trade bloc and free trade deals with the European Union, plus incentives aimed at luring investment far from neighbors.

Of specific interest to venture capitalists, however, is Vietnam'south tech-savvy pop with a median age of just 30.

"Vietnam has the highest-performing computer science students I've ever encountered," said Neil Fraser, a software engineer at Alphabet Inc'south Google, who visited local schools.

The Organisation for Economic Co-operation and Development ranks Vietnamese 15-year-olds over peers in the U. S., Australia and Britain in science and maths.

"The exercises I watched them solve ... would be considered challenging problems for a Google hiring interview," Fraser said.

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Data covering Vietnamese startups is scarce, but Singapore-based startup community Tech in Asia - itself a startup with investors including Japan'south SoftBank Grouping Corp - reckons there are about 1.500 in operation. That number, relative to population, represents a higher concentration than the 2.100 in Indonesia, 2.300 in China and 7.500 in India.

Startups in Vietnam, love Indonesia, prosper with small government support beyond valid advice and $10.000 cash below a scheme dubbed Vietnam Silicon Valley. In contrast, China announced a $6.5 billion fund mainly for tech and green energy startups latest year, while India pledged $1.5 billion in January.

"I map to grow this company for five years then sell it," said Beeketing'south Quan. "Then I may become an angel investor myself."

Most of Vietnam'south startups are in e-commerce, a sector where sales grew around thirty-five % latest year to $four billion, and whose 2.7 % contribution to overall retail sales indicates ample room for growth.

Supporting e-commerce are tech-related logistics startups such as Giaohangnhanh which helped reduce overall logistics costs in Vietnam to a fifth of gross domestic product latest year from a fourth just one year earlier.

Other startups comprise the operator of food-finder app Lozi that received a combined seven-figure investment from DesignOne Japan Incorporated and Singapore'south Golden Gate Ventures.

Tran Minh Son, one of four Lozi founders, quit Univ in PA to concentrate on the app.

"It was love cutting my legs off so I've number way back," he said. "My parents complained quite a lot. They said, 'You're not my son - move out'."

Lozi, launched in two thousand-twelfth, presently boasts 600.000 registered users and 4 million unique visits each month.

(Reporting by Mai Nguyen; Editing by Martin Petty and Christopher Cushing)

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