Mar 18, 2013

Vietnam - Venture funds have superfluous capital, but lack projects

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VietNamNet Bridge – Venture funds have still been seeking opportunities to enrich their investment portfolios.

The news that DFJ VinaCapital or CyberAgent Ventures, Kusto Vietnam – the venture funds - disbursed money for Vietnamese businesses of different types, from seed-funding, early-stage or growth-stage have appeared on many local newspapers.

In Vietnam, besides IDG Ventures which has been well known with its investments in 40 companies, mostly operating in the fields of Internet, software, e-commerce and media, CyberAgent Ventures Inc from Japan and DFJ VinaCapital, a joint venture between Draper Fisher Jurvetson in Silicon Valley and VinaCapital in Vietnam, are also the big names.

Local newspapers have reported that the two latter venture funds are “hunting” for new investment opportunities.

Kusto Vietnam, belonging to a group of foreign investors, who have been investing in Kazakhstan, Russia, China, Turkey and Vietnam, have reportedly injected money in, a searching portal, MobiVí and

DFJ VinaCapital, which began its operation in 2006, now manages the capital of $30 million. According to Than Trong Phuc, Managing Director of DFJ VinaCapital, the majority of the fund’s capital has been disbursed, but it still plans to make investment in some more businesses.

Recently, the fund has withdrawn capital from VON (Vietnam Online Network), the owner of two websites HR Vietnam and, when VON merged into the US CarreerBuilder on February 21, 2013.

As such, DJF VinaCapital still keeps investment capital in five investment deals, including Dai Su Tre Group, the owner of Yeah 1 TV and Yeah 1 Family TV channels, TS24 (Tax Online service), Direct with Hotels.

A representative of DFJ VinaCapital said that the fund plans to “close the accounts” this year, but it would still much depend on whether it can find suitable businesses to inject money in.

Meanwhile, he said the Vietnamese market still does not have necessary conditions for venture funds to operate effectively.

To date, venture funds have been pouring money into Vietnamese businesses at different stages of their development.

Nguyen Manh Dung, Director of CyberAgent Ventures in Vietnam, said when deciding to invest more than 500,000 dollars in, a website on the food and restaurant services, which now has 10,615 addresses in HCM City and 21,805 nationwide, in November 2012, the project was still… on paper.

Meanwhile, ColorBox, a game and mobile app developer on Apple’s iOS and Google’s Android, when receiving the investment from CyberAgent, still could make profit.

Also according to Dung, 12 investment deals have been made by CyberAgent Ventures so far. These include the ones made directly by CyberAgent Ventures Group, and the ones made by CyberAgent Asia Internet Fund I, specializing in pouring money in South East Asia.

The majority of the businesses which received the investments are in the seed-funding stage, or early-stage, while only two in developed businesses, namely VNG and VMG.

To date, the Japanese CyberAgent Ventures has set up two venture funds reserved for the Asian market. Of the two, CyberAgent Asia Internet Fund I has disbursed money for five companies in Vietnam and two in Indonesia.

The fund has revealed its plan to making heavier investment in South East Asia, raising the investment capital from 20 million dollars to 50 million by 2015. This shows that venture funds still have been looking for opportunities in the region.


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