SEVERAL regional private equity firms have banded together to establish a Vietnamese alliance, aiming to facilitate US$35 billion of investment into the South-east Asian country over the next decade.
The newly established Vietnam Private Capital Agency (VPCA), founded by five partners from funds including Golden Gate Ventures, Do Ventures and Monk’s Hill Ventures, will organise seminars, support private equity firms and both lobby and work with the government on policy. Its goal is to facilitate investment in sectors from agriculture to education and health care, said Vinnie Lauria, a board member for the agency.
It’s unclear how the association arrived at its investment projection, which is several times higher than Vietnam’s tech sector attracts annually, at present. But many investors tout the country’s potential at a time US-China tensions are prompting businesses to relocate factories and target new markets for growth. Vietnam’s digital economy is expected to surpass US$90 billion in 2030 from US$30 billion last year, according to a joint report from Google, Temasek Holdings and Bain & Co.
“Vietnam is a hot market,” said Lauria, a Golden Gate founding partner. “The motivation to establish the VPCA stemmed from key developments in Vietnam, including rising wages and GDP, increasing FDI, export growth post-Covid, government innovation programmes, and rapid infrastructure development.”
The industry association hopes to broaden its membership to 100 individuals by the end of next year, from more than 40 now. Existing member firms also include Vertex Ventures, Ascend Vietnam Ventures and Mekong Capital.
Vietnam’s startup scene has exploded in past years, driven by the rise of firms such as games developer VNG Corp. But as with much of South-east Asia, the country’s tech sector has struggled to raise capital since a post-Covid economic downturn.
In 2021, Vietnam drew a record US$2.6 billion through 233 private deals, up from US$700 million via 140 deals a year prior, according to the Google report. But total capital invested in Vietnamese tech startups last year plunged 17 per cent to US$529 million, placing it third among South-east Asian countries, according to a separate report from Do Ventures and the Vietnam National Innovation Center. BLOOMBERG
