Startups in Vietnam head to digital transformation
Startups in Vietnam have been trending to adopt the technology of the Fourth Industrial Revolution to gain market success amid mounting competition.
At a young age of nearly 30, Ho Viet Anh, CEO of OSAM Cloud Innovator, has made great achievements. OSAM is now the only company specialising in cloud computing in Vietnam.
Although it was established just around two years ago, OSAM has made an amazing digital journey to engage local startups and the business community in the changing world of technology.
OSAM was established on growing demands for Amazon Web Services’ (AWS) features/services for computing, storage, databases, networking, analytics, machine learning, as well as AI and Internet of Things (IoT) among fast-growing businesses and startups in Vietnam.
OSAM supports new users who might not know where to start with AWS and other technology providers’ services by providing consultation activities which can design cloud adoption road maps for them.
“In the recent two-three years, I saw startups turning towards the technology of Industry 4.0 such as Internet of Things (IoT), big data, and machine learning among startups, especially those operating in agriculture and green energy. There is no difference in the technology trends between Vietnam and regional markets,” Ho Viet Anh told VIR.
“OSAM now has more than 200 customers, 35 per cent of which are startups, and the number is growing day by day. Cloud technology helps them reduce operation costs while enabling them to realise new business ideas for development with high security.”
Looking back at 2016 when Viet Anh first approached AWS services and had the idea to establish a cloud computing user group for Vietnam – AWS Vietnam User Group – as a channel to share knowledge and hands-on experience among cloud practitioners, it attracted little attention from businesses.
The months passed, and the situation changed positively – to the point that it now has a strong network of over 5,000 users.
OSAM’s technology journey proves how important technology innovation is to businesses, especially startups. OSAM is one from the growing startup community riding this trend in Vietnam, where startups have grown impressively in recent years both in terms of number and value.
In 2012, Vietnam had around 400 startups, and the figure then rose four-folds in 2015 to 1,800 startups and hit about 3,000 in 2017-2018. Abivin, Propzy, and Finhay are among the examples of success urging other startups forward.
Industry insiders said that 2018 was a year that cross-border technologies have become more accessible to startups and businesses of all sizes.
Startups now have more advantages to develop thanks to the presence of blockchain, e-commerce, Software as a Service (SaaS), AI, and IoT.
They forecast that the five technologies promise to have wide impacts on all sectors in Vietnam in the months to come.
“Startups often have new ideas and they dare to try them. With the AWS cloud platform, they can realise this in a fast way, thus helping them save time and money thanks to the 'pay-as-you-use' policy,” said Paul Chen, head of Solutions Architect, ASEAN at AWS.
According to a report by the Asia Cloud Computing Association, Vietnam ranked 8th in 2018 among the 14 surveyed countries in Asia in terms of international connectivity, which is one of the essential factors for adopting cloud computing technology. The country ranked 13th or 14th in the past.
Looking at the past, 80 per cent of startups failed due to a lack of capital, but now the scene seems to have changed as more venture capital funds are interested in the Vietnamese startup market.
Currently, more than 40 venture capital funds have investments in Vietnamese startups, twice as many as in 2015.
Not only international venture funds, but also many more domestic giants such as FPT, Viettel, Vingroup, CMC, and CenGroup have been joining the race.
2018 witnessed huge investment moves from leading venture funds in startups. Vinacapital established Vinacapital Ventures for $100 million; Vingroup launched the fund to support startups and the fund to support sci-tech research with an investment of VND2 trillion ($86.96 million); and a venture fund of $300 million was set up to support innovation.
According to the annual report on startup investments in 2018 by Topica Founder Institute (TFI), in 2018, Vietnamese startups received $889 million worth of investment from 92 deals with domestic and international venture capital funds, tripling the 2017 figure and a six-fold rise from 2016.
Recently, the Vietnam Venture Summit 2019 – the first of its kind in Vietnam – drew in over 100 domestic and international venture funds, including the well-known names such as Softbank Vision Fund, CyberAgent Ventures, Mekong Capital, 500 Startups Vietnam, DT&I, IDG Ventures Vietnam, VinaCapital Ventures, and BCG Digital Ventures.
Among them, 18 venture investment funds committed to invest VND18 trillion ($782.6 million) in local startups in the next three years. VIR
As Vietnam, one of the hottest startup hubs in the world, is welcoming a huge wave of venture capital, its tech startup firms are expected to quickly reach the unicorn status, which means they are valued $1 billion or more.
Vietnam has about 3,000 innovative startup businesses or startups. However, not many startups are successful in calling for investment. It is estimated that less than one-third of enterprises have acc
The first Vietnam Venture Summit held in Hanoi recently saw venture capital funds commit millions of USD to Vietnamese startups, illustrating the confidence foreign investors have in the Vietnamese market.