Southeast Asia ‘Startup Golden Triangle’ of Vietnam-Singapore-Indonesia Sparks Region’s Next Wave of Growth; Golden Gate Ventures Doubles Down on Vietnam with Two Offices

Rising client class, educated workforce and surge in post-pandemic digital demand set tone of Vietnam’s golden decade forward

HANOI, Vietnam, Could 30, 2022 /PRNewswire/ — Golden Gate Ventures, a enterprise capital fund based by Silicon Valley natives and primarily based in Southeast Asia for over a decade, was joined by the Vietnam Nationwide Innovation Centre (NIC) and founders of main Vietnamese startups to announce the opening of two new Golden Gate Ventures workplaces in Ho Chi Minh Metropolis and Hanoi. The group mentioned alternatives within the SEA ‘Startup Golden Triangle’ of Vietnam, Singapore and Indonesia – and its affect on the area’s subsequent wave of progress.

Earlier this month Golden Gate Ventures’ founding associate, Vinnie Lauria, settled in Ho Chi Minh Metropolis along with his household to open the corporations’ new Vietnam workplaces. In the present day he signed an MoU (Memorandum of Understanding) at the moment with the Vietnam Nationwide Innovation Centre to cement a long-term partnership to assist Vietnam develop its startup ecosystem and assist Vietnamese entrepreneurship. The MoU sees Golden Gate Ventures bringing investments into the market, fostering the alternate and progress of latest concepts and improvements, and as a catalyzing pressure to assist Vietnamese startups construct regional companies. Golden Gate Ventures now has workplaces throughout Singapore, Vietnam and Indonesia – mirroring the SEA ‘Startup Golden Triangle’.

“We started our plans to determine workplaces in Vietnam in 2019 when Golden Gate Ventures co-hosted the very first Vietnam Enterprise Summit to assist speed up the expansion of Vietnam’s significance within the ‘Startup Golden Triangle’. Regardless of the pandemic, we had been dedicated to get boots on the bottom and make our efforts actually native. We spent the final yr working round COVID-19 restrictions so my household and I may transfer to Vietnam, perceive and recognize native tradition, and guarantee senior management was on the bottom. We’re very excited to be right here,” stated Vinnie Lauria, Founding Associate at Golden Gate Ventures, who has since relocated to Vietnam.

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Vietnam’s Time to Shine

Following an amazing decade of progress, the worldwide funding neighborhood begins to pay extra consideration to Southeast Asia . Golden Gate Ventures has been firmly established in Southeast Asia for over 10 years with workplaces at the moment throughout Singapore, Vietnam and Indonesia – mirroring the SEA ‘Startup Golden Triangle’ and is uniquely positioned to serve the area.

Vietnam is rising to the highest to hitch the ranks of Singapore and Indonesia as one other jewel of the area marked by a report excessive of USD1.4 billion Vietnamese startups in 2021^[1], 1.6 instances increased than the earlier report of US$874 million in 2019.

“2021 was a really robust yr for Vietnamese startups, netting our highest-ever funding of US$1.4 billion, and newly established enterprises within the first 4 months of 2022 have elevated by 31.9% from two years in the past. This coupled with the optimistic momentum of international funding, larger recognition of Vietnam’s potential throughout the startup ecosystem, and Vietnamese startups reaching a brand new degree of sophistication, we expect investments to double within the subsequent three years,” stated Mr Vu Quoc Huy, Director at Nationwide Innovation Centre in Vietnam, a unit of the Ministry of Planning and Funding.

Whereas Vietnam has been on the radar of founders and traders within the final decade, the subsequent few years is the place consideration to this market goes to actually repay due to the confluence of its rising client class, younger and educated workforce, and accelerated digital demand post-pandemic.

Home consumption is forecast to extend at a fee of 20% per yr^[2]. In actual fact, the nation appears to be like set to be a big driver of Asia’s consumption story over the subsequent decade, including 36 million extra to its client class. Its middle-class inhabitants is believed to be the quickest rising in Southeast Asia, and estimated to comprise about 40 per cent of the entire inhabitants at the moment, up from a mere 10 per cent in 2000. By 2030, this determine may attain 75 per cent^[3].

Vietnam’s younger and educated workforce is one other draw, with 70 per cent of the inhabitants beneath 35 of its inhabitants of over 98 million^[4], and a literacy fee of about 95.4% – amongst the very best in Asia^[5].

A 3rd issue contributing to Vietnam’s potential is the rising post-pandemic digital demand. Vietnam added 8 million new digital shoppers, with 55% of them coming from non-metro areas between the beginning of the pandemic and the primary half of 2021. Vietnam’s 2021 Web economic system GMV was forecast at US$21 billion – a 31% YoY surge that was underpinned by a 53% progress in e-commerce. Looking forward to 2025, the general Web economic system will possible attain US$57 billion in worth, rising at a 29% CAGR^[6].

“Within the subsequent decade, we anticipate to see Vietnam develop at a fee that now we have by no means skilled earlier than. We’re on the good place of getting extraordinarily excessive web penetration, a really robust home market, founders with progressive concepts that may scale past Vietnam, and companions which can be serving to to develop Vietnam’s startup ecosystem right here on the bottom in Vietnam. The Vietnam authorities has invested within the final decade to place many pillars in place – from schooling assist to infrastructure build-out and ecosystem improvement. These investments are actually paying off – it’s clear from the great investor curiosity and very excessive startup exercise,” stated Kim Ngoc Thanh Nga, Head of Ecosystem Improvement Division, Vietnam Nationwide Innovation Middle.

Singapore Continues its HQ Stronghold

Singapore continues to carry its place because the area’s go-to market as a regional and world HQ, and the pandemic has additional strengthened this positioning, with funding urge for food remaining robust in digital providers that surged on account of COVID-19. Regardless of its dimension, Singapore web economic system continues to develop at breakneck tempo: the gross merchandise worth (GMV) of its web economic system was estimated at US$15 billion in 2021, up a whopping 35% year-on-year^[7]. This surge is underpinned by a forty five% progress in e-commerce, e-grocery, and digital monetary providers. With 97% of Web customers additionally being digital service shoppers, the city-state’s penetration fee stays highest within the area. Its Web economic system will possible attain US$27 billion by 2025, rising at a 16% CAGR^[8].

Indonesia’s Great Home Market and Robust Localised Innovation

Indonesia is the third arm of the SEA ‘Startup Golden Triangle’ not solely as a result of it’s the area’s most populous nation and largest economic system, however the pandemic has fuelled digital progress and localised innovation not like any the nation has seen earlier than. Between the beginning of the pandemic and up until the primary half of 2021, Indonesia has seen 21 million new digital shoppers, of which 72% are from non-metro areas – an indication of accelerating penetration within the area’s largest market. The nation’s Web economic system GMV was estimated at US$70 billion final yr – surging 49% YoY, underpinned by a 52% progress in e-commerce. Looking forward to 2025, the general Web economic system will possible attain US$146 billion in worth, rising at a 20% CAGR. As one of the vital vibrant digital providers markets within the area, Indonesia continues to draw robust world capital inflows, with the e-commerce, fintech, healthtech and edtech segments grabbing the highlight^[9].

“SEA has at all times been a area of great alternative, however scaling enterprise fashions has been a problem for a lot of due to the distinctive dynamic of every market. Our analysis into the area’s largest unicorns has proven that placing the distinctive strengths of Singapore, Indonesia and Vietnam collectively creates a profitable mixture to assist them innovate and develop at lightspeed,” stated Vinnie Lauria, Founding Associate at Golden Gate Ventures.

“As a VC turned entrepreneur, I perceive that the important thing markets of Southeast Asia are Vietnam, Singapore, and Indonesia, the ‘startup golden triangle’. Founders in Vietnam want to know enterprise fashions that work in these markets to be able to construct the most effective product and to scale regionally,” stated Trung Huynh, Founding father of Mio, a social commerce platform for groceries and contemporary produce that lately bagged its Sequence A funding and beating out conventional commerce fashions.

Startup Golden Triangle Alternative Areas

Though healthtech, fintech and provide chain analytics proceed to be huge bets on this ‘Startup Golden Triangle’, gaming and D2C are key sectors to observe. Southeast Asia, one of many fastest-growing video games markets on this planet, generates the biggest revenues within the world gaming sector, with Indonesia, Vietnam and Singapore main the pack for cell gaming within the area. The area is anticipated to register a CAGR of 8.5% over the forecast interval of 2022 to 2027, pushed by a quickly rising on-line inhabitants, elevated cell gadget utilization, and with virtually two-thirds of the gaming inhabitants engaged in eSports^[10]. Gaming is a very large alternative space in Vietnam, with revenues of virtually $530 million in 2020, double these of 2015^[11].

D2C manufacturers have almost tripled the capital raised from traders in 20, which amounted to over US$2 billion throughout 105 offers. The section had witnessed a dip in 2020 when it raised US$735 million, whereas in 2019, the entire got here near US$1.5 billion by means of 120 offers, based on Enterprise Intelligence knowledge.

For extra info on the SEA Startup Golden Triangle, please seek advice from a quick ready by Golden Gate Ventures accessible on this hyperlink: https://ggv.sg/startup-golden-triangle

About Golden Gate Ventures

Golden Gate Ventures is a VC fund in Southeast Asia (SEA) based by Silicon Valley natives. Since 2011, Golden Gate Ventures has launched 4 funds and invested in over 60 corporations. The agency focuses on investing within the rising client web class in Southeast Asia. Breakout corporations embrace Carousell (cell classifieds), CodaPay (cell funds), Appota (Vietnam cell publishing platform), Loship (final mile logistics), Mio (social commerce), Carro (Auto Market), Vui (early wage entry) and Xendit (Cost Processing).

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SOURCE Golden Gate Ventures