Startups and Venture Capital
3 Signs of Vietnam’s Golden Age
The world’s most surprising startup hotspot
I did it.
I moved my entire family out to Ho Chi Minh City (“HCMC” or “Saigon”), Vietnam.
Why leave the Bay Area?
Some say I’m crazy.
But that’s because they don’t know what I know.
Investing in Vietnam is like betting on the hottest NBA rookie of all time.
Yes, there were some exciting has-beens, like China. And there are some steady hypes, like India. But when it comes to early-stage investing, you don’t care about the GOAT(s) or steady players, you pay attention to the rising stars, the best of the best rookies. You pay attention to countries like Vietnam.
There’s a reason why even tech giants, like Google and Apple, are turning their manufacturing away from China and over to Vietnam.
3 Signs Vietnam is Booming
Three clear signals indicate that the ‘Golden Age of Venture’ is here for Vietnam. This happens once in the lifetime of a country. It happened in Korea in 2002. It happened in China in 2008. It’s finally here for Vietnam. For the next 15 years, there will be a sudden influx of foreign venture capital into Vietnam and it will receive a lot of global attention.
The big question on everyone’s mind should be whether you want to be a part of it or not. You need to make this decision now (or within the next few years) or you’ll miss the boat.
Sign #1: Unicorn Breakthroughs
Ever heard of the Bannister Effect? It explains sign #1 — the surge of unicorns in Vietnam.
Until Roger Bannister crushed the mile in less than 4 minutes it was thought to be an impossible feat. But once Bannister broke the 4-minute mile on May 6, 1954, it only took another month and a half for someone else to break the 4-minute mile barrier. By 1957, 15 additional runners had broken the 4-minute mile.
The Bannister Effect is the phenomenon of one person achieving the “impossible” and showing others it can be done, thereby, causing waves of others to also believe and achieve the “impossible.”
To date, there are a total of four unicorns in Vietnam:
- VNG Corporation (est 2004). Gaming giant that launched Zalo, the dominant chatting app in the country, much like WhatsApp in the States, WeChat in China, and Kakao in Korea. VNG became a unicorn in 2014.
- VNPay (est 2007). Vietnam’s quintessential cashless payment platform with over 15 million active users per month, VNPay has a major stake in the Vietnamese Fintech sector. VNPay (owned by VNLife) became a unicorn in 2019.
- Sky Mavis (est 2018). Creator of Axie Infinity, which is one of the first crypto games to achieve notoriety, offering a mix of NFTs and Pokemon-like battle pets that can be sold, Sky Mavis revolutionized crypto gaming. Sky Mavis became a unicorn in 2021.
- MoMo (est 2007). Vietnam’s leading e-wallet, MoMo is a super app that allows users to transfer money, process insurance, and even buy more data and minutes for their mobile devices. MoMo became a unicorn in 2021.
The Bannister Effect is in full effect for Vietnam startups. Many ambitious founders believe that their startups can achieve unicorn status thanks to the above four unicorns paving the way.
This is more than a psychological placebo. With each unicorn, everyone’s collective knowledge and confidence are growing exponentially. This will have a domino impact on the overall economy as VCs and startups scale and exit more and more Vietnamese companies globally.
Sign #2: Direct Flights
In January 2022, 80.8M Vietnamese were on FaceBook. That’s a whopping 80.2% of Vietnam’s population using a US social media platform. What’s mind-boggling is that despite this high volume of connectivity there were, up to this point in history, ZERO direct commercial flights between the two countries.
Fast forward a few months, and now there are 4 direct flights per week between the US and Vietnam. This is a HUGE sign!
In 2016, Phoenix, Arizona realized $3.4 billion worth of economic benefits thanks to nonstop international flights. Among web-first consumers and digital workers, how direct flights shape a city’s fortune is probably not the most obvious and immediate thing that comes to mind. But a study by economists at Harvard University and the University of Zurich observed that pairs of cities with at least one weekly connection have, on average, significantly higher levels of business activities and trade.
Vietnam Airlines now offers direct flights between SFO and SGN.
And this is just the beginning.
This past summer I heard directly from His Excellency Phạm Minh Chính, the current Prime Minister of Vietnam, confirming that there will be another direct between LAX and Hanoi by Spring 2023!
Sign #3: Crypto Hotspot
For two consecutive years, Vietnam ranked first among all countries for cryptocurrency adoption. Most people outside of Vietnam are surprised to hear this fact.
Despite the recent fiasco and setbacks in the crypto world, interest in blockchain technology remains high and strong in Vietnam. The excitement in the air is tangible and real. You can literally feel it throughout the streets of Saigon. The best and brightest minds in town are flocking to build WEB3 communities.
The WEB3 growth spurt in Vietnam is hardly surprising.
The median age in Vietnam is 31.9 years. Vietnam is young! And the drive to learn and improve is powerful among the youth.
Vietnam is also among the globe’s top 10 countries producing the most engineers. The competitiveness of its tech workforce is growing stronger by the minute.
Finally, Vietnam has given birth to several prominent metaverse startups, including Axie Infinity, which is a rage among GenZ. Every budding founder dreams of being the next Axie Infinity. Thousands of startups are popping up in Saigon, and they believe the answer to the problems they are solving involves WEB3.
By these accounts, it is only natural that Vietnam becomes the crypto hub for startups in Southeast Asia.
Come One and Come All
Saigon is a magical city. It tops many rankings (see here, here, and here!) and is the destination of choice for those seeking adventure within a fast-paced yet safe metropolitan city.
Many FIRE movement practitioners and advocates love European countries (like Greece or Portugal) and Latin countries (like Brazil or Mexico). But if people expand their horizons to Asia, they’d find hidden gems like Vietnam. According to the Big Mac index, things are also much more affordable in Vietnam than in Brazil or Mexico.
But what really puts Vietnam on top, in my book, are the people. Family-oriented values are high and social trust among strangers is strong. I experienced this firsthand when I recently checked out at a Winmart cash register.
Before purchasing any fruit people weigh them at a scale near the fruit section to retrieve a pricing label (much like the way we would at Wholefoods from the butcher or deli section). I didn’t know this. I was already at the cash register holding my one-year-old son in one arm and my credit card in my other hand. Moreover, there was already a line behind me, so I wasn’t going to go all the way back to the fruit section.
“I don’t need the apples.” I politely smiled. The young lady behind the cash register understood. But she also processed the fact that I was a tired father, wanting to quickly pay and get out.
In the middle of ringing me up, she briefly excused herself, took the bag of unpurchased apples to her manager, conferred with him, and then returned to simply give me the bag of apples for free. All of this happened within seconds.
Instead of leaving an unsavory situation as is, she took the moment to solve an otherwise cumbersome problem for me, for her, and for Vinmart. She probably felt good about helping me out, and in the long run, Vinmart benefits from all this as I am now a super-satisfied customer. Vietnam is full of kind-hearted, innovative, young problem solvers like this.
When I run into people in Vietnam, it’s evident to me why Vietnam’s startup scene is so hot and will continue to be hot for some time. This is just the beginning. The golden age of Vietnam is here and hopefully, if you’re reading this post, you’ll know to partake in this historic moment.
