An interview with Mr Henry B. Nguyen, Managing General Partner of IDG Ventures Vietnam
IDG Ventures was the first venture capital fund in Vietnam. What was behind your decision to invest here?
In general, I believe the Vietnamese market will be one of the fastest growing markets in the world over the next ten years. Specifically, I think the technology market in Vietnam holds tremendous promise. Vietnam has some of the greatest market potential in technology for two reasons:
The first is that the potential market in Vietnam is huge because of the rapid growth of mobile phone, Internet, computer and consumer electronic use. Other markets in Vietnam have also developed remarkably fast. The country now has 83 million people, 70 per cent of whom are under 35. Vietnam is young, educated, mobile and keen on adopting the newest technologies.
The second reason is that in the next five to ten years, Vietnam is going to be in a position to produce globally competitive new technologies. That is the vision we have for Vietnam. By the end of this decade, Vietnam will have 40 million mobile phone users and 40 million Internet users. This growth is almost unprecedented. For all these reasons, we are very optimistic about the future of technology in Vietnam.
Vietnam is opening up its market soon because of its recent international commitments. What are the opportunities and challenges facing entrepreneurs in the technology field?
Most Vietnamese enterprises are of small- and medium-size, so they will have a tough time competing against large, multinational companies who enter the Vietnam market. These new competitors will bring deeper resources in terms of capital, technology, intellectual property, and human resources. However, I think this competition will challenge local enterprises to become stronger in order to remain competitive.
The market in Vietnam will grow quickly the young and upwardly mobile population will have greater and greater purchasing power for consumer goods, technology and other services. The rapid growth will create opportunities for both foreign and domestic companies.
In the end, WTO accession will force Vietnamese companies to develop more quickly in order to be globally competitive. In the short term, I think there will be a lot of difficulties that Vietnamese companies are going to face but eventually they will be smarter, stronger and more competitive globally.
Do you think there will be a new wave of US investment in Vietnam in the years to come?
Absolutely. There is already a tremendous level of US investment in Vietnam and this will only increase as key sectors are further opened to American involvement, particularly telecommunications and technology, financial services, and wholesale and distribution. The US is currently the leading foreign investor in Vietnam and I expect that level to continue to grow. Vietnam’s entry into the WTO will provide an even larger catalyst for investment than the BTA did six years ago as the underlying investment environment and legal infrastructure in Vietnam has improved significantly.
With US$100 million under management, IDG Ventures Vietnam helps entrepreneurs grow innovative companies on a global basis. What can you tell us about the Fund’s direction in Vietnam? IDG Ventures Vietnam is focused on making early to middle stage investments in the areas of technology, media, and telecommunications. This includes investments in IT/Software companies, internet, E-Commerce, and online services, hardware and electronics, traditional and new media, and wireless technologies. As the only foreign investor currently focusing on the technology sector in Vietnam, the Fund hopes to invest in companies that will be the foundation of Vietnam’s developing technology market. We invest in early stages of development of companies, and we work closely with the management teams of our portfolio companies to ensure they have the greatest probability of success.
You have been working in Vietnam for nearly five years. What strikes you as the country’s most impressive features? I think anyone who has come to visit Vietnam can sense the energy and vibrancy of the country as soon as they step out of the airport. Just by what you can see out on the street, you can get a sense of the entrepreneurial spirit of people here. In the end, the country is built on the shoulders of its people – and the people of Vietnam are young, energetic, hardworking, intelligent, and entrepreneurial.
Reported by Hai Chi
Vietnamese
