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Investment Focus

DFJ VinaCapital’s goal is to leverage the strong growth and potential of the Vietnamese technology sector. We focus on technology companies that:

  • Cater to the Vietnamese consumer
  • Utilize the Vietnamese workforce as a supplier of goods and services
  • Are founded by a member of the global Vietnamese diaspora

We appreciate that the current business environment has no borders. As such, our investments are global, with Vietnam as a common thread.

The Vietnamese technology consumer

Of Vietnam’s 86 million people, over 60% are under 30 years of age. This demographic is literate, upwardly mobile and globally aware. They are active consumers of technology, including social networks, mobile value-added services and online games with virtual goods.

With a 29% internet penetration rate, Vietnam is ranked 4th in Asia and 18th globally in terms of Internet usage. Broadband growth exceeds 45% per year. In terms of mobile phone usage, some estimates put the penetration rate at over 100%. 3G has been successfully deployed in major cities with 4G discussions already underway. Vietnam is a country that has fully embraced technology.

Vietnam as a supplier of goods and services

Vietnam is well-positioned to be a supplier of technology goods and services on the global marketplace. Several key factors for this success include: 

  • Strong government support for the IT sector: the Vietnamese government has categorized technology as a priority sector, giving preferential tax treatment for up to 15 years
  • Increase in skill level and expertise of local businesses: With Vietnam’s entry into the World Trade Organization in 2007, many multinational firms have expanded operations into the country, including Compal, Foxconn, Samsung and Olympus. Intel has also recently opened its largest plant that at full capacity, will produce more microchips than all its global factories combined. With these foreign investments, Vietnam benefits not only from an increase in GDP, but also from the transfer of skill and workforce training.
  • Cheap labor: While the skill level in Vietnam has increased, the labor costs have remained low compared to other Asian countries, such as China and India. As costs increase in other countries, businesses will look more toward Vietnam as the preferred source of goods and services.

China +1 / India +1

Vietnam has been a favored “+1” for companies looking to diversify their China or India dependency. The next few years will see Vietnam solidifying that status, demonstrated by the strong growth in both the technology manufacturing (China +1) and software outsourcing (India +1) sectors.

Invest in proven entrepreneurs with Vietnamese descent

The global Vietnamese diaspora is 4 million strong, with the majority concentrated in the United States. Much of Silicon Valley's technical workforce is of Asian descent, which is made up of predominantly Chinese, Indians and Vietnamese. Similar to the Chinese and Indians who were educated and trained overseas and returned to build technology enterprises in Beijing, Shanghai and Bangalore, the Vietnamese technology entrepreneurs have been returning to Vietnam to build companies that will be at the forefront of the economic transformation.

In addition to returning to Vietnam, many overseas Vietnamese are starting businesses abroad with planned expansion into Vietnam, or with Vietnam as a designated source of labor and services. The Vietnamese ecosystem is complemented by these businesses and are welcomed by both the government and local workforce.