East Ventures, Go-Ventures Add Portfolio to Startup Ecosystem in Vietnam

Vietcetera, a digital media network based in Ho Chi Minh City, Vietnam, managed to book pre-series A funding of $2,7 million. Led by North Base Media, this round was also attended by a number of local investors, namely East Ventures and its own investment arm Gojek, Go-Ventures.

The media startup was founded in 2016 by Hao Tran and Guy Truong; currently said to have 20 million readers per month. Specifically, they are targeting millennials and gen Z -- if compared to players from Indonesia, Vietcetera's concept and business are similar to IDN Media.

For East Ventures, this is not their first portfolio in Vietnam. Previously they had invested in CirCO, the operator co-working space; Sendo as a platform E-commerce; and Kim An Group perpetrator local. In Southeast Asia itself, East Ventures currently seems to focus more on early-stage startups in Indonesia and Singapore, when viewed from the quantity of its portfolio.

As for Go-Ventures, so far from our records they have not provided other investments to Vietnamese startups. However, this market is already familiar to the corporate group, as they have ventured there through service expansion Gojek, even so with the Go-Ventures portfolio, PasarPolis, which is currently also entering the market.

East Ventures looks at Vietnam's ecosystem

Although it does not yet have a representative office or special partner stationed in Vietnam, East Ventures is by far the local venture capitalist with the largest portfolio there.

To DailySocial.id, East Ventures Partner Melisa Irene said, as a country with the second largest population in the region, the digital economy growth there is quite fast. In addition, Vietnam is known as one of the suppliers of technical talent for the global digital ecosystem; which means fulfilling variables for the development of a strong local team.

Furthermore, Irene provided her analysis from a demographic perspective, "Compared to Indonesia, the two regions have a large number of young people and have the same pattern. Vietnam has a population of more than 97 million with internet penetration of 70,3% in January 2021. Meanwhile, in the same period, Indonesia had a population of more than 274 million and internet penetration reached 73,7%.”

“The two countries also have the same composition of the population in terms of age groups, young people make up more than half of the country's population; Vietnam is around 55%, while Indonesia is around 70%."

Opening up opportunities in the Vietnamese market

According to the e-Conomy SEA 2020 report, the GMV generated by the Vietnamese market ranks 3rd after Indonesia and Thailand. By 2020 the value of GMV generated from local digital ecosystems has reached $14 billion and is projected to grow to $52 billion by 2025.

The potential that continues to grow makes ecosystem actors in Indonesia interested in opening opportunities there. From our records, so far there have been several local venture capitalists who have portfolios in Vietnam; even local startups that have start expanding there.

The existence of similar demographics and the potential for strengthening business through local teams is certainly one of the attractive compositions for digital businesses to penetrate there – in addition to the large market potential of the existing population.

However, that doesn't mean expanding there is without challenges. In different interview opportunities, Irene said, "There are three challenges that must be considered [when wanting to expand to Vietnam], namely related to the limited talent at the national level. mid-management upwards, changing regulations, and relationship-based business practices. All three need business executors who are very familiar with local dynamics."