Over the past two years, Vietnam’s internet and mobile market has caughtthe attention of both major domestic and international investors, saidthe Vietnam Investment Review.

Many venture capital firms are willing to invest in start-ups and new ideas, the newspaper said

Accordingto vice president of IDG Venture Vietnam (IDGVV) Nguyen Hong Truong,the start-up wave in Vietnam is bigger than most countries in ASEAN,especially in the internet and mobile sector. With diverse products andservices, many local companies have already even expanded into overseasmarkets, Truong added.

Currently, IDGVV is funding 40 companiesin the online and mobile service, technology, education, media andentertainment fields. With the dynamic growth of mobile and internetusers, firms funded over the past two years have reached an annualgrowth rate of 30 percent.

“IDG will continue investing in firms with potential, however our requirements will be higher,” Truong noted.

Comparedto developed countries, Vietnam’s start-ups are facing with capitalshortage.Truong however believes that investment flows into ASEAN,particularly by Japan and Korea, is an opportunity for Vietnam’sinternet and mobile start-ups to blossom.

Online marketing ande-commerce are two promising areas. The increasing number of users islikely to encourage electronics entertainment firms to supply moreinternet and mobile services, serving the marketing purposes of manycompanies.

IDGVV is planning to expand the market through M&Aby finding international strategic partners for its investee firms, andby expanding leading internet firms’ operations to the regional scale.

Inthe early stage Vietnam’s start-up trend, IDGVV invested into a widerange of firms, some of which have become very successful such as VNGJSC, VC Corp JSC, and Vat Gia JSC.

Not all venture capital firmshave been as successful as IDGVV. General director of DFJV, a fund underVinaCapital, Than Trong Phuc said that after seven years operating inVietnam, DFJV has invested in only 10 companies.

Last year DFJV withdrew from VON JSC, which owns two job finding websites named kiemviec.com and hrvietnam.com.

Accordingto Phuc, in the early stage there were assistance organisations helpingto strengthen start-ups before venture capital firms jumped in. But nowthese venture capitalists have to compete with not only each other, butalso a rising number of individual investors, while not as manyinvestee companies are showing potential.

Phuc admitted that eventhough American, European and Asian investors are targeting Vietnam’smarket, funding for DFJV has not been easy over recent years.

Currently DFJV is assisting firms with a high growth rate, as its goal is to triple its capital investment.

“DFJVwill invest in either a technology or entertainment firm this year,”Phuc said. In the near future, e-commerce, entertainment andcommunication firms will be at the top of their list, he added.

Theword on the street is that IDGVV is the most risk-loving, capital-looseventure capitalist in the market, but it has yet to publish an updatedlist of new portfolio companies since its last report several years ago.

Whenit first came to Vietnam, IDGVV regularly posted its list ofinvestments. But once the market became more stable, they only post newadditions at the investee firms’ request, Truong explained.

Mostcompanies that are funded by venture capital firms are stable andcapable of achieving high growth rates. They admit that they can hardlysurvive without the fund.

One example worth mentioning is Appota,the first mobile content distribution platform in Vietnam. With theirname in the top-nine digital content start-ups in Southeast Asia, Appotais now valued in the millions of dollars.

Appota’s GeneralDirector Do Tuan Anh said the firm is being financed via Singaporean andJapanese venture funds. Apart from capital, they are bringing in othersupport such as networks and long-term consultancy, he added.-VNA