500 Startups Vietnam grabs $14M to invest in local companies

500 Startups has set its sights on Vietnam, a historically dormant market that’s recently emerged as one of the most rapidly-expanding tech ecosystems in Southeast Asia.

The Silicon Valley startup accelerator and venture capital fund has raised $14 million for 500 Startups Vietnam, it’s Ho Chi Minh City-based micro-fund focused on Vietnam-headquartered startups or companies catering to the Vietnamese market. The fund launched in March 2016 with a $10 million target to capitalize on a new cohort of internet-era startups.

500 Startups partners Eddie Thai and Binh Tran manage the fund. Thai is the former director of CJ CGV Vietnam, a cinema and film distribution company; and Tran is the co-founder and former chief technology officer of the social influence tool Klout, which sold to Lithium Technologies for $200 million in 2014.

“Several years ago, Vietnam was not an obvious tech investment destination: the country was poor … fraught with bureaucracy, and struggling to create an ecosystem for the few, disconnected founders and even fewer active angels and VCs,” Thai wrote in a blog post. “But entrepreneurial folks did see elements of something special: a fast-growing economy; a substantial supply of low-cost, high-tech talent; and a broad & experienced Vietnamese diaspora increasingly interested to reconnect with and contribute to the country. A new wave of tech founders decided to take the plunge.”

500 Startups Vietnam has funneled a total of $3 million in 36 companies to date. It invests across industries, including e-commerce, edtech and blockchain. The partners plan to back up to 64 more companies, writing checks sized between $100,000 and $250,000.

Google report: Southeast Asia’s digital economy to triple to $240 billion by 2025

Investment in Southeast Asia (SEA) has picked up significantly in 2018. According to PitchBook, companies based in SEA have raked in more than 4x capital this year than last. Vietnam, in particular, has become a buzzy destination for VCs. In addition to 500 Startups raise, several new funds have cropped up in the country, like ESP Capital, VinaCapital Ventures, Startup Viet Partners and Zone Startups Vietnam, helping to accelerate investment.

Growth in Vietnam is showing no signs of slowing. The nation’s digital economy is expected to triple in size, accumulating a value of some $33 billion by 2025, according to Google’s third “e-Conomy SEA” report. YoY, its e-commerce market has doubled and the digital advertising, gaming industry, online media and online travel market have seen tremendous development.

“In Vietnam, the internet economy is akin to a dragon being unleashed,” the report states.