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Vietnam’s Do Ventures raises USD 28 million to invest in local tech firms

Vietnam’s e-commerce sector is expected to grow by 43% from 2015 to 2025.

Courtesy of Do Ventures.

Vietnam-based early-stage venture capital firm Do Ventures has raised USD 28 million for its Do Ventures Fund I to invest in local tech startups.

The firm raised more than half of its fundraising goal of USD 50 million from institutional investors from Korea and Singapore including NAVER, Sea Group (NYSE:SE), Vertex Holdings, and Woowa Brothers.

Do Ventures was co-founded by Le Hoang Uyen Vy, who is the former CEO of Vietnamese e-commerce site Adayroi.com and a general partner at ESP Capital, along with Manh Dung Nguyen (Dzung), who formerly worked as a director at venture capital firm CyberAgent Capital in Vietnam and Thailand.

Speaking to KrASIA, Vy said that the fundraising round began in the first quarter of 2020 amid the pandemic. “COVID-19 is such an unprecedented event that makes it difficult for investments, since most investors have low visibility of the global financial landscape, and travel restrictions seriously impede our mobility. Specifically, the travel restrictions have affected our original plan quite a bit,” she said.

She added, “From investors’ perspective, we find [that] this a good time to support tech startups that can leverage the changes in consumer behaviors during the COVID-19 outbreak. Though the pandemic surely poses various inevitable difficulties, we believe that it’s also a favorable moment to invest in high-potential startups.”

Do Ventures, founded early this year, plans to invest in companies that tap into Vietnam’s younger population and fast-growing middle-class. Vy told KrASIA that the fund will be deployed to invest in two tiers of companies in Vietnam.

The first tier includes business-to-consumer (B2C) platforms that “complement an effective ecosystem of services around young customers such as education, healthcare, and social commerce due to significant changes in customer behavior after COVID-19.”

While the second tier focuses on regionally scaled business-to-business (B2B) platforms the “create synergies for tier 1 portfolio companies and enable these companies to scale regionally.” This includes companies that offer software-as-a-service (SaaS) solutions, data management, and e-commerce services.

Vietnam’s digital transformation

“The Vietnam consumption market is at its tipping point and ready to be captured by technology companies with innovative products. We are enthusiastic about the opportunity to boost the local economic growth at this very key circumstance,” said Manh Dung Nguyen (Dzung), co-founding partner at Do Ventures.

The Vietnamese ecosystem has been widely seen as one of the hottest destinations for tech startups and investors, driven by an emerging middle-class, robust growth in the digital economy, and a strong entrepreneurial culture. According to the Google-Temasek-Bain report released in 2019, Vietnam’s digital economy is expected to top USD 43 billion by 2025, with e-commerce at the forefront of this transformation.

The Vietnamese government has just rolled out a national e-commerce development plan in May this year, which forecasts that 55% of its 96 million citizens will shop online by 2025, while e-commerce revenue in the country is expected to reach USD 35 billion by the same year, accounting for 10% of national retail and services earnings, according to a news report by VnExpress.