Vietnam is increasingly a thriving tech ecosystem connected with SEA
Jun Wakabayashi, Analyst (若林純 / 分析師)
Jun is an Analyst covering both AppWorks Accelerator and Greater Southeast Asia. Born and bred in America, Jun brings a wealth of international experience to AppWorks. He spent the last several years before joining AppWorks working for Focus Reports, where he conducted sector-based market research and interviewed high-level government leaders and industry executives across the globe. He’s now lived in 7 countries outside US and Taiwan, while traveling to upwards of 50 for leisure, collectively highlighting his unique propensity for cross-cultural immersion and international business. Jun received his Bachelors in Finance from New York University’s Stern School of Business.
Several batches ago, we started to see a steady influx of Vietnamese founders applying to our AppWorks Accelerator. It was a rather curious phenomenon because at the time, we had only begun expanding our scope outside of Taiwan to include Southeast Asia and had really only seen inward interest coming from developed markets like Singapore and Hong Kong.
AppWorks Analysts Natalie Lin and Jun Wakabayashi (from left to right) join several Vietnam founders at an AppWorks Founders Forum in Hanoi, Vietnam November 2019
Indonesia had long been earmarked for obvious reasons, but Vietnam was nowhere on our radar. And yet, we ended up having founders of startups such as Innaway (AW#17), Triip.me (AW#18), KardiaChain (AW#18), and Abivin (AW#19) join our program. Granted, each of them had different motivations for coming to Taiwan, but it was enough to pique my interest in understanding the Vietnamese market, specifically the context and mentality in which these founders were coming from.
A handful of trips and dozens of meetings later, I’ve grown to become quite fond of the ecosystem in Vietnam. There’s an almost festive-like energy reverberating throughout the local startup scene. The country is experiencing a level of economic prosperity it has never seen before, and as a result, a generation of eager entrepreneurs laser-focused on tapping into the limitless possibilities at hand. Based on my observations, there are several key factors currently driving this growth.
The macros
Vietnam’s ascension to the regional, if not global, spotlight has been nothing short of an economic miracle. Just three decades ago, the country was one of the poorest in the world, with gross domestic product per capita treading around US$100 and over 70% of its population living in poverty.
Thanks to the Doi Moi reforms introduced in 1986 that gradually saw the liberalization, privatization, and diversification of its economy, Vietnam today is a comfortably middle-income country, with an accelerating market driven by a large, increasingly wealthy, and digitally connected middle class. From 2000 to 2015, Vietnam exhibited an average GDP growth rate of 6.9%, most recently clocking in at 7.08% in 2018, placing it among the fastest-growing economies in the world.
With 95.5 million people, Vietnam boasts not only the third-largest population in Southeast Asia, but also a young one, with over half under the age of 35. Levels of disposable income have also never been higher, and internet and mobile adoption are becoming more ubiquitous among its consumer base.
These are the fundamentals that should whet the appetite of any early-stage investor worth their salt, and many seem to agree. In the 2019 eConomy SEA report by Google, Temasek, and Bain & Company, Vietnam was designated as the third-most funded country in Southeast Asia after Singapore and Indonesia, having attracted over US$1 billion in funds over the last few years. The country’s internet economy has expanded by 38% on an annualized basis since 2015 – growing far more quickly than its regional peers with the exception of Indonesia – and is now set to reach US$12 billion or 5% of its GDP in 2019, according to the report.
It was only a few years ago when Vietnam lagged behind the majority of its peers in terms of capital allocation, deals done, and overall interest. But now, the conversations are evidently shifting from “Why Vietnam?” to “How do I get a piece of Vietnam?”
The tech talent
A classic characterization of the ideal Southeast Asian startup is one that is headquartered in Singapore, targeting Indonesia, with designers in Thailand, customer service in the Philippines, and engineers in Vietnam. It’s a gross oversimplification of each country’s strengths, but it’s nonetheless rooted in some degree of truth.
Vietnam’s heavy investment in science, technology, engineering, and math education over the last 15 years, combined with improved internet connectivity and a young, low-cost workforce, has spawned a thriving IT outsourcing industry. Vietnam is now home to roughly 30,000 IT companies, while churning out 80,000 IT graduates a year from its universities, according to Vietnam’s Ministry of Science and Technology. The country has also usurped China as Japan’s second-largest software outsourcing partner, right behind India, and houses substantial research and devvelopment bases from the likes of IBM, Intel, Oracle, Samsung, and Grab.
What does this mean for startups? This country is producing a legion of skilled developers ready to join a startup or bootstrap one of their own.
Many of the local founders I met previously worked for an outsourcing company (or in many cases simultaneously), but turned to entrepreneurship and startups in search of greater opportunities for growth and impact.
Of course, the talent pool is not without its challenges. The talent is certainly there, but it’s raw, and it’s young. As the ecosystem is still relatively nascent, there are very few people who have experience managing teams and solving problems at scale.
Moreover, while Vietnam’s education curricula in technical subjects like math and science have evolved tremendously in the last two decades, outsourcing is still an inherently low-level, low-value process, leaving a void of product-focused engineers that understand the holistic impact of their efforts on end users.
Nevertheless, the foundation is there. Vietnamese students regularly outperform the majority of their regional peers, while notably surpassing student performance in several Western countries, such as the UK and the US. Especially now, as we embrace the onset of deep technologies like AI and blockchain, Vietnam’s massive talent pool – if properly refined and nurtured – gives the country a unique comparative advantage over other Southeast Asian countries when it comes to producing prospective tech startups.
The sea turtles
In Taiwan, they’re called “hai gui;” in the Philippines, “balikbayan;” and in Vietnam, “Viet Kieu.” Collectively, they’re commonly referred to as “sea turtles”: locals who lived overseas, typically in Western countries, and eventually returned home to work or start their own businesses.
These returnees are often a primary driver of value creation for developing markets. That’s largely due to the experience gained, best practices learned, and network accumulated from some of the world’s leading universities and companies, which they’re able to integrate into their own ventures. Among Southeast Asia’s current crop of unicorns, the majority of their founders received some form of education abroad. For example, Grab’s Anthony Tan, Gojek’s Nadiem Makarim, and Traveloka’s Ferry Unardi all studied at Harvard Business School.
Looking at Vietnam’s current startup hall of fame, the majority of founders studied abroad at some point or another:
Son Tran, founder of Tiki.vn, University of New South Wales
Hai Linh Tran, co-founder and CEO of Sendo, Nanyang Technological University
Ba Diep Nguyen, founder of Momo, Curtin University
Tuan Pham, founder and CEO of Topica Edtech Group, New York University
And the list just goes on from there. In fact, even Minh Le, chairman and CEO of VNG – the country’s one and only unicorn – received a part of his higher education abroad at Monash University.
But this is just the beginning. There’s an estimated 4 million Vietnamese currently living overseas, with more than 130,000 of them studying abroad every year. Ho Chi Minh itself receives approximately 30,000 young Vietnamese returning from overseas annually to seek business and startup opportunities. The government has also doubled down on its efforts to attract overseas talent by creating relaxed visa programs for Viet Kieu and exempting them from certain investment requirements.
The homegrown ecosystem
Although Vietnam has yet to produce a regional success story the likes of a Grab or Shopee, the country does have its fair share of rising stars and homegrown champions that are effectively holding their own against foreign entrants. There’s Tiki.vn for ecommerce (reportedly raising over US$100 million in its latest round), Momo for e-wallet (recently raised US$100 million in series C funding), Zalo for messaging (owned by VNG), and also a handful of local ride-hailing contenders including Be (started by VNG’s co-founder) and FastGo (recently expanded in Singapore).
The fact that consumption hasn’t been completely dominated by international companies is indicative of a robust, end-to-end, and local ecosystem, underpinned by key pillars of support including angels, institutional investors, accelerators/incubators, media, and co-working spaces collectively split across major tech hubs in Ho Chi Minh, Hanoi, and Da Nang.
The tone at the top has also played a pivotal role in the proliferation of the startup scene in Vietnam. Techfest, for example, is an annual event organized by the Ministry of Science and Technology that draws out over 5,500 attendees, 250 investors, and 600 startups. Earlier this year, the ministry also hosted the first iteration of the Vietnam Venture Summit, which brought out over 100 domestic and international funds to “unfreeze capital flows” and jumpstart innovation.
The time is now
Vietnam has come a long way since its agrarian roots. The country’s transition into the digital era is full steam ahead, with the transformation of its major cities into sprawling metropolises and key economic centers already well under way.
And the ones at the heart of this metamorphosis are the Vietnamese people, defined by a growing population of students, coders, engineers, entrepreneurs, and innovators.
For locals, there’s never been a better time to start a business. The country’s overall development and rapid urbanization over the past 20 years, sprinkled in with a formidable sense of national pride and ethnic belonging have collectively opened up a waterfall of opportunities that are now ripe for the taking.
For international stakeholders, especially those from developed markets where several generations of serial entrepreneurs and investor know-how have already run their course, there still exists a level of experience arbitrage in Vietnam. It’s a unique window of opportunity to diffuse tactics, playbooks, and best practices into an emerging market just now coming to terms with increasing affluence, consumer sophistication, and digital transformation.
隨著越來越多 AI 新創冒出頭，台灣在創業加速器、教育、研究等面向，也呈現蓬勃發展。在創業加速器部分，2010 年成立、自 2018 年 8 月 (AW#17) 起限定招募 AI / Blockchain 新創的 AppWorks Accelerator，目前為止已經招收三期 AI / Blockchain 共 89 個新創，其中有
44 組 AI、11 組 IoT 新創，持續為台灣 AI 生態系挹注新能量。
AppWorks 之外，包括微軟新創加速器 (Microsoft for Startups)、Taiwan AI x Robotics Accelerator 等，皆是以 AI 新創團隊為主要招募對象的創業加速器。台灣人工智慧學校、台灣人工智慧實驗室，則分別是台灣在 AI 教育與研究領域的代表性機構，也期望越來越多的資源會注入 AI 領域的發展。
The Taiwan’s AI Ecosystem Map 19H2 由 AppWorks 製作，每半年更新一次，有任何指教與建議，請 email 至 [email protected]。
Our founders represent innovations in AI and blockchain that are happening across Greater Southeast Asia.
AppWorks Accelerator, the region’s longest-running accelerator with a focus on AI / blockchain, presents Demo Day #19, a showcase of 18 founders from Greater Southeast Asia (ASEAN + Taiwan), who are pushing innovations in AI / IoT and Blockchain in a US$ 3 trillion region.
This founder-focused showcase underpins the case that Taiwan as a startup hub is an integral component of this growth region. Within only 18 months, AppWorks alumni have expanded their presence in GSEA 1.6x, testimony that the accelerator and the country are a launchpad for founders driving business change in a region where population growth is rising 3.5x the pace in Greater China.
The 18 founders pitching today demonstrate experiments in the AI / IoT and Blockchain frontiers that are catalyzing growth in industries from real estate, to finance, to medical science.
A total of 14 AI / IoT startups and four Blockchain startups pitched. Six of those founders are from Taiwan, and the other 12 come from around the world and GSEA. More than half of the founders in this batch are serial entrepreneurs, with many hailing from established tech companies like Google, Qualcomm, Samsung, MediaTek, Agoda, IBM Watson, Initium Media, and PepsiCo.
Having spent four months developing these frontier-shaping technologies in Taiwan, they will be pitching in front of the investors and potential corporate partners from Taiwan and SEA, including investment professionals and executives from Fubon Financial Holdings, Taiwan Mobile, Cathay Life Insurance, Wistron Corporation, Hungtai Group, UDN, FarEasTone, as well as Taiwan’s National Development Council, and many more. The purpose is to provide an opportunity for investment and business collaboration for these founders.
All of the founders pitching today have produced early traction, especially in customer acquisitions. Their products have pushed into new markets and many used Taiwan as a launchpad for potential accelerated growth throughout the region.
Telepod is a smartEV shared scooter and a battery kiosk network, already rolled out in seven markets
Jin-Ni Gan, founder of Telepod, a miniEV mobility startup based in Singapore, has grown her mobility and battery kiosk platform to seven markets in an effort to bring transport efficiency and climate harm reduction to cities in developing SEA markets.
Matters founder Annie Zhang was influenced by her journalism background to help content creators get paid, and remembered, through using blockchain
Annie Zhang, founder of Blockchain startup Matters from Hong Kong, will demonstrate a Blockchain platform that enables content providers to be paid for their content, rather than to have their content and revenue opportunities taken hostage by advertising algorithms and walled social media gardens. She has scaled to over 20,000 customers during her accelerator session.
Shaq Tu, founder of Beseye, has booked giant Tokyo Railways as a client for the startup’s wifi-managed AI cameras, which scan the movement of people near railway tracks to prevent accidents.
SELF TOKEN from Taiwan creates Blockchain digital assets through Ethereum Smart Contracts and is committed to creating an ecosystem of immersive entertainment experiences. Founder Jack Hsu also directed “The Last Thieves”, the world’s first film based on Blockchain. He was nominated this year for the Best New Director in the 56th Golden Horse Awards in Taiwan.
WeavAir is a sensors and analytics company started by Singularity University graduate Dr. Natalia Mykhalova. The company uses AI and IoT sensors to build a recurring revenue business model that helps developers and landlords pinpoint trouble spots in their building control systems. The team have embarked on projects with 12 clients in SEA, including FarEastone and the Airport Authority of Hong Kong.
Arical co-founders Clement Tien (left) and San Wong (right) are using AI to work with companies like HongKong Land to shrink the amount of time it takes to perform real estate market analysis and architectural feasibility studies
Arical, co-founded by Clement Tien and San Wong from Hong Kong, is a platform that “unlocks the potential of property development” by using AI to create “instant” feasibility studies that provide value to investors and communities. Their AI 3-D generation engine enables clients like HongKong Land to spend only a few minutes to map out all feasible possibilities to optimize for the ideal product mix / tenant mix, as they have done recently in a project in Manila, the Philippines. This is an order of magnitude more efficient than the weeks and months it often takes to come up with new proposals.
The construction equipment platform Fourcons was started by founder Felix Hartantio, from Indonesia. Fourcons provides an AI-driven platform for finding, verifying and managing construction equipment. Only one month after launch, they have fulfilled US$11k in orders in several provinces in Indonesia, and they are rushing to fulfill the remaining US$800k, even as they scale to new provinces.
In the area of real estate, Blyng is an AI virtual assistant created by co-founder Julien Priour, which helps agencies cut down on missed opportunities in qualifying inbound leads. The company has secured several real estate agency clients in Europe and in GSEA.
Anthony So, co-founder of OnMyGrad, faced a difficult time after his education and now wants to help other students like his former self understand exactly what they need to do to succeed in careers of their choice
Career development and workforce transition platform OnMyGrad, co-founded by Anthony So, from Hong Kong, works with recruiters to help students prepare for roles in several industries. They have engaged with 3,800 participants and 10+ universities over the course of the accelerator period, and taken in HKD $2 million (US$ 256k) in total revenue in just two months.
KaChick co-founder Peggy Cheung and her fellow co-founder Larry Lam are travelers who want to unite photographers and brands through the capture of beautiful moments with loved ones
KaChick co-founders Peggy Cheung and Larry Lam have built a platform for sourcing authentic photography from over 1,500 amateur and professional photographers, and have taken steps to pair those media assets with brands in the hospitality and entertainment space to drive more engaging marketing and branding campaigns at lower margin cost. They have beta trials in place with regional companies like Dyson, Grand Hyatt, Hong Kong’s Ocean Park, and AIA.
Dent & Co founder (and dentist) Steve Chu will attempt to bring more smiles to the world through a medical services AI chatbot
Other AI startups include Dent & Co, a medical services AI chatbot created by dentist Steve Chu. Fluv, a pet care platform for local pet parents and sitters, is being demonstrated by former PepsiCo marketing staffer Candace Chen.
Mellow, created by first-time founders Chester Szeen and Teresa Chan from Hong Kong, is an app to help young people and families manage finances. It enables children to use their “first money” through debit card usage and parent-regulated accounting. The app aims to grow into a platform targeting a US$2 trillion market, and they have created early development success in Hong Kong and Japan.
Also in the vertical of payments, but focused on Blockchain, is Dapp Pocket, a crypto wallet app for Dapp lovers, created by Anderson Chen. And Portto, a Blockchain startup created by three former members of the crypto company Cobinhood promises to make the KYC and onboarding process for using Blockchain simpler.
AI/IoT startup Whoopee Robot, created by founder Morris Lu, is now operating in five local shops and has served over 10,000 cups of robotically-delivered espresso beverages.
Chien Lee demonstrated his AI-powered PR service SparkAmplify, which delivers an automated public relations system for clients. In one case, the platform generated 127,000 views for Mavin, Inc. during recent press events.
Husband and wife team Dr. Lisa Hsu and Mark Mai built Gigvvy Science to shorten the time it takes to push scientific research into the hands of people who can use it to save lives
Finally, New Zealand-based co-founders Lisa Hsu and Mark Mai will demo Gigvvy Science, a platform for speeding up the sluggish vetting and reviewing of critical science research.
Background and Recap AppWorks Chairman and Partner Jamie Lin said at the opening of the event:
“The twice a year AppWorks Demo Days have always been THE go-to event for investors and corporate leaders to witness firsthand the development of cutting-edge technologies and their business applications that have a GSEA twist as well as meeting future startup stars.
With AW#19, 68% of the founders hail from countries such as Indonesia, Vietnam, Hong Kong, Malaysia, Japan, Ireland, Canada, the US, and China. Of the 31 teams that were admitted to the AW#19 program, 19 are working with AI/IoT, 10 with Blockchain/Crypto, and 2 are incorporating both technologies. What’s more, 23% of founders from this batch are female, which marks one of our highest percentages in recent years.
With the addition of the graduates from AW#19, there are now a total of 376 active startups and 1,113 founders in the AppWorks Ecosystem. Collectively, all companies produced a turnover of US$ 4.97B, an annual increase of 98% compared to the same time last year, and have fostered the placement of 11,162 employees, 1,047 more than the year prior. Altogether, the Ecosystem raised a total of US$ 1.1B, an annual increase of 36%, with an aggregate valuation reaching US$ 4.72B, growing 29% YoY.
While the numbers alone are impressive, the trend of ASEAN+Taiwan is even stronger. Over time this connection continues to mark Taiwan as a launchpad for SEA founders. As we observe today’s pitches, keep in mind that as growth continues to accelerate in this dynamic region, this integral connection will continue to deepen and grow stronger.”
Founding Partner and Chairman of AppWorks Jamie Lin
The State of AppWorks Ecosystem
The State of the AppWorks Startup Ecosystem — 376 active startups; 1,113 founders, and US$ 4.97 billion in value, with over 11,000 jobs created
值得注意的，從本屆新創團隊中，可看到 AI 不斷深入各產業與垂直領域，出現更多創新應用。例如，來自台灣的 Dent&Co，由一群牙醫師共同創辦，協助牙醫診所打造跨 Messenger、Line、WhatsApp 等通訊平台的客服機器人，提供自動提醒回診、診後追蹤、線上約診等服務，降低診所的人力成本與看診爽約率，上線半年來，已獲得破百間牙醫診所使用，服務超過 7 萬人次；來自美國的 Fluv 毛小愛，則透過 AI 系統打造寵物照顧平台，針對臨時需要寵物照顧服務的毛孩家長，媒合經過線上認證的寵物愛心家長協助照顧，上線一週內，就媒合達 1,300 位使用者、完成超過 200 次服務；來自印尼的 FourCons，則以 AI 系統提供挖土機、吊車等重型機具設備的租用媒合服務，上線四個月後，服務已遍佈印尼 8 個省，10 月收到的訂單總值達 80 萬美元。
來自美國的 Fluv 毛小愛，透過 AI 系統打造寵物照顧平台，針對臨時需要寵物照顧服務的毛孩家長，媒合經過線上認證的寵物愛心家長協助照顧。
來自法國的 Blyng，建構 AI 房地產仲介經紀系統；來自紐西蘭的 Gigvvy Science，由一對科學家夫妻共同創辦，運用 AI 與 Machine Learning 技術，提供學術論文發表平台，致力提升科學論文的發表效率與品質；來自美國的 SparkAmplify，則以 AI 系統推薦線上記者的模式，協助企業與品牌進行 PR 推廣。
在本屆來自香港的新創團隊中，同樣也可發現各種結合 AI 技術的創新服務。例如，KaChick 建立以 AI 驅動的平台，串連起亞洲遊客以及在地攝影師，以效率更高、品質更佳、費用更低的方式，捕捉旅遊的精彩瞬間，2018 年上線以來，已建立起涵蓋 60 個城市、超過 2,000 位攝影師的服務網絡；Arical 則建立針對房地產開發投資的 AI 資訊分析平台；OnMyGrad 則運用 AI 技術，建立針對大學畢業生的職涯進修的教育平台；Mellow 的 App，則可協助父母培養小孩的金錢觀念與責任感。
來自香港的 KaChick 建立以 AI 驅動的平台，串連起亞洲遊客以及在地攝影師，以效率更高、品質更佳、費用更低的方式，捕捉旅遊的精彩瞬間。
