Could Vietnam become the next Silicon Valley?

03/02/2016
Eddie Thai and Binh Tran are the kind of American entrepreneurs you'd expect to meet in Silicon Valley.
Binh Tran is the co-founder of a successful tech company, Klout, which he sold for $200m (£140m) in 2014. Eddie Thai, the younger of the two, was educated at Harvard and Yale.
But the pair have now decided to focus their attentions, not in the ultra-competitive corner of California that's home to Google, Apple and Facebook, but in Ho Chi Minh City, southern Vietnam.
As partners in US-based venture capital firm, 500 Startups, they think there are more investment opportunities to be found in this rapidly developing country.
"Vietnam in the past 20 years has been one of the fastest growing markets in the world," says Mr Thai.
"Ten years ago, there were only about four million internet users. Now there are more than 40 million. Ten years ago there were virtually no smartphones in use here. Now there are 30 million smartphone users.
Image copyright Dung Tuan Nguyen
Image caption Eddie Thai (left) and Binh Tran think Vietnam's tech scene has a bright future
"The trajectory is phenomenal."
Mr Tran adds: "If you look at scores for Vietnam in reading, math and science, they actually score higher than countries like the US and the UK. That's the foundation for computer science that's given Vietnam an edge."

Saigon Silicon City

There are some who believe this communist country could even become the next Silicon Valley.
"If you were here six or seven months ago, this was like a rice farm," says Hieu Minh Nguyen, as he motions to the dusty plain beneath our feet, about 15 minutes drive from the centre of Ho Chi Minh City, formerly known as Saigon.
Image copyright Saigon Silicon City
Image caption Saigon Silicon Valley project aims to attract $1.5bn of investment
Image copyright Siagon Silicon City
Image caption A sign of things to come?
"But if you're here in six months, you will see Saigon Silicon City right here. We will build high-rise buildings, and along the river we will have a landscape with a park, and also a golf course and tennis, all kinds of entertainment."
Aiming to create the world's next Silicon Valley is ambitious. But Mr Hieu, a Vietnamese-American investor and chairman of the project, is a believer.
Late last year, a ceremony was held to turn the first sod on what he hopes will become a technology hub that will attract two dozen companies and $1.5bn worth of investment.
Image copyright Getty Images
Image caption Could Vietnam's largely agricultural economy receive a boost from hi-tech industries?
Samsung and Intel already have offices in Ho Chi Minh City at the nearby hi-tech park, attracted by a young, well-educated labour force and generous tax incentives.
Add to that a vibrant start-up scene and Mr Hieu's dream might be more achievable than it first appears.

'Success story'

When it comes to choosing which start-ups to invest in, Eddie Thai and Binh Tran say they're looking for companies that solve problems.
"I don't like anything that's super trendy," says Mr Tran, in an apparent move away from Klout, which ranks users' social media influence.
"I just like basic building blocks, technologies that are going to help businesses run better."
"We're funding the next VNGs," says Mr Thai, referring to Vietnam's biggest tech success story - the gaming, chat and e-commerce platform VNG, valued at $1bn in 2014.
Image copyright Getty Images
Image caption The 68-storey Bitexco Financial Tower soars above Ho Chi Minh city
But for both entrepreneurs, the decision to work in Vietnam was about more than a promising start-up scene and good demographics.
"I don't have any family here," says Mr Tran, when we meet in a rented conference room on the 42nd floor of Bitexco Financial Tower, Ho Chi Minh City's gleaming skyscraper, famous for its protruding - though reportedly unused - helipad.
"My grandparents, aunts, uncles, they're all in the US.
"So being able to come back here, to understand the people and get in touch with my roots, [while] at the same time, be a part of the foundation for Vietnam's future, that's an opportunity I just had to do."
Image copyright Getty Images
Image caption Vietnam, a one-party communist state, is attracting foreign investment
For Eddie Thai, entrepreneurship is a family trait. He proudly recounts the story of his grandfather, a Vietnamese farm worker who saved up money to buy oxen, then rented the animals to other farmers. "A kind of Uber for oxen," he says with a laugh.
His parents migrated to the US with nothing, but were able to start a restaurant and build up a small real estate portfolio, which he says allowed him to have "a normal American life". He visited Vietnam as a teen.
"I saw how far Vietnam had come, but how far there was still to go. I knew at some point I would be back here to empower others."
Image copyright GetSpaces
Image caption French entrepreneur Quynh-Huong Duong moved from Paris to Ho Chi Minh City two years ago
That's a feeling shared by Quynh-Huong Duong, the French entrepreneur behind GetSpaces, a booking platform for meeting rooms and event spaces in Ho Chi Minh City. She moved to the city from Paris two years ago.
"I wanted to do something for Vietnam," she says. "The people here are really entrepreneurial. There's a different kind of mindset than in France. French people are very conservative. Here it's really like in the US, like: 'Yes, we can'."

Local heroes

But Vietnam's tech scene isn't made up of eager ex-pats alone.
In 2004, Vietnamese entrepreneur Dinh Anh Huan co-founded the mobile phone retail chain Thegioididong.com, which means The Mobile World in English. Last year, the company made its stock market debut, raising more more than $250m.
Image copyright Seedcom.vn
Image caption Vietnamese entrepreneur Dinh Anh Huan wants to export products to other countries
"I got around $30m," says Mr Huan. "I invested in around 20 companies in Vietnam. Right now, my vision is not about the money. My vision is to create products in Vietnam and export them to other countries."
Those products range from the agricultural - he has tea, coffee, strawberry and flower farms - to retail. Mr Huan has invested in a chain of mother-and-baby stores, a women's shoe factory, an online fashion site and Vietnam's second largest e-commerce site, Tiki.vn.
But the 35-year-old's main focus is Vietnam's millions of small business holders. His company Seedcom.vn offers website building, point of sale software, digital marketing, call centre services and logistics.
Image copyright EPA
Image caption Google boss Sundar Pichai said his firm would train 1,400 IT engineers in Vietnam
Google chief executive Sundar Pichai visited Vietnam in December and, after meeting with Prime Minister Nguyen Tan Dung, announced that the search engine giant would help train about 1,400 local IT engineers.
He said Vietnam would soon become one of Google's most important markets.
"It will easily be in the top 10 countries for many companies and people who are building products. I think you're in the process of that transition," he said.
"The transition is under way; just give it a bit more patience."

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All comments [ 12 ]


MaskOf Zero 4/2/16 07:34

Vietnam’s economy is quickly developing and it seems the rest of the world is sitting up and taking notice.

Love Peace 4/2/16 07:35

Over the last ten years Vietnam has seen a sharp spike in people with access to the internet and the usage of smartphones, as well as a jump in large scale infrastructure and technology projects, startups and entrepreneur-driven investment and activity.

Jane smartnic 4/2/16 07:35

Combine the fast growing economy and improved conditions for investment with the fact that Vietnamese students are highly skilled in computer science, and you have all the ingredients for the world’s next tech hub.

yobro yobro 4/2/16 07:36

Enter the new development ‘Saigon Silicon City,’ a new project that plans to house around two dozen companies, parklands, a golf course, tennis courts and a variety of entertainment facilities.

Only Solidar 4/2/16 07:37

there’s also the $1.5 billion US in investment that the technology hub is hoped to attract.

Pack Cassiopian 4/2/16 07:38

The project is being built on an area of 52 hectares with total investment of VND860 billion ($40 million) and will be able to house over 24 enterprises operating in the field of high technology or technology support with total investment of about VND32.2 trillion ($1.5 billion) when fully occupied. The project will begin in May and start to attract investment in 2016.

Deck Hero14 4/2/16 07:38

Saigon Silicon City’ could attract more brands, investors and businesses, and make Vietnam the player in the global economy in the region.

John Smith 4/2/16 07:40

For the first time in Vietnam, Ministry of Science and Technology and the Vietnamese Government take an initiative directed at stimulating the growth of technology Startups in Vietnam.

Gentle Moon 4/2/16 07:40

The launching ceremony “Silicon Valley Ecosystem in Viet Nam‟ on June 4, 2013 showcased the commitment of the Government to build a Silicon Valley for Startups in Vietnam.

LawrenceSamuels 4/2/16 07:41

Without further ado, let us together take the first steps toward this incredible future.

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