Foreign investors keen on VN edtech start-ups

Education start-up Gotit, which has operations in Vietnam, recently mobilised US$12.5 million from some US funds.

Foreign investors keen on VN edtech start-ups

Students meets with Hung Tran, founder of education start-up Gotit. — Photo Gotit

In 2016 it had raised over $9 million in seed and series A funding to build on its on-demand platform for knowledge.

It then became a partner of Microsoft Office.

Another education start-up, ELSA Speak, which stands for English Learning Speech Assistant, a mobile phone application that utilizes artificial intelligence to help non-natives with English pronunciation, recently beat 1,200 competitors to win the first prize at SXSWedu, a competition for education technology start-ups in the US. It uses artificial intelligence to help users improve their English pronunciation.

ELSA Speak has raised over $15 million and has around four million users in more than 100 countries and territories around the world and was listed as one of 13 promising tech startups in Southeast Asia by the South China Morning Post.

Late last month Vietnamese education start-up Everest Education raised $4 million in a Series B round led by Hong Kong private-equity fund Hendale Capital, according to media reports.

The round also saw the participation of venture capital fund Viet Capital and Singapore’s Nullabor.

Early last month Singapore- and India-based education fund manager Kaizen Private Equity (Kaizen PE) decided to invest $10 million in YOLA, a Vietnamese ELT service provider backed by local PE firm Mekong Capital.

All these start-ups have some common features: their projects have high applicability, they are developing e-learning or EdTech, and their initiators are all Vietnamese.

GoTit! was founded by Dr Tran Viet Hung and Elsa Speak by Van Dinh Hong Vu and Ngo Thuy Ngoc Tu.

What accounts for this sudden interest among foreign investors in Vietnamese edtech start-ups?

Vietnam and some other countries like India, the Philippines and Mexico, which face major population pressure, have had to opt for e-learning to keep up with the education levels in developed countries.

Vietnam’s e-learning market is valued at $2 billion by experts and has enormous potential, thus attracting young people who are strong in digital technology.

Ten years ago some companies pioneered e-learning and achieved reasonable success, including Violet.vn, Hocmai.vn and Topical, who have millions of followers.

The quick success of the edtech companies also means Vietnamese people are able to easily use sophisticated education technology, again underlining the huge potential of the market.

The country’s e-learning market size is calculated based on the fact that every year Vietnamese are estimated to spend $3-4 billion to send their children abroad to study.

Besides, the sheer numbers are attractive: it is a country with more than 22 million students.

The Vietnamese online training market has in fact been attracting much attention from foreign investors for years.

At the end of 2016 the country had 309 investment projects in the fields of tech-based education and training with total registered capital of over $767 million.

Market expects banks to follow SBV, cut interest rates

On September 16 the State Bank of Vietnam (SBV) began to cut several key interest rates by 0.25 percentage points to pump prime the economy.

The cuts, the first by the SBV since October 2017, brings down the refinancing and rediscount rates to 6 per cent and 4 per cent.

 

The annual overnight electronic inter-bank rate and rate on loans to offset capital shortage in clearance between the central bank and domestic banks have been cut to 7 per cent.

The interest rate on bids for valuable papers through open market operations is reduced from 4.75 per cent to 4.5 per cent.

According to the SBV, it previously used monetary policy measures to stabilise interest rates in the context of rising international rates, which contributed to macroeconomic stability and ensured reasonable growth.

But it has now opted for the new cuts since the global economy has become more volatile and less favourable, and many central banks, including those of the US and Europe, have cut key interest rates.

Experts had been asking persistently why Vietnam effected no change though many economies around the world had already loosened monetary policy, including cutting rates.

Dr Can Van Luc, member of the National Financial and Monetary Policy Consultation Council, said the central bank’s decision to lower key interest rates was apt amid the current global economic instability.

Besides, Vietnam’s inflation rate was fairly benign at 2.57 per cent, which gave the SBV some leeway to cut the rates.

Veteran economist Nguyen Tri Hieu said Vietnam was suffering from the impacts of the US-China trade war especially since they were also Vietnam’s two biggest trade partners. So it had to act, he said.

How do the rate cuts affect the market?

According to BIDV Securities Company, the market took the cuts in a positive manner as the first sign of policy loosening.

They would help weaken the dong somewhat against the Chinese yuan, helping sustain Vietnam’s exports as well as competitiveness, it said.

ACBs Securities Joint Stock Company said the cuts were a move to stabilise the economy and support growth against the background of a slowdown in some sectors seen in August.

Lowering interest rates is a powerful form of economic stimulus and the lower interest rates are expected to push up personal consumption and encourage enterprises to expand production.

Experts said prospective borrowers now expect a wave of interest rate cuts by banks.

Some bankers said with the lower cost of capital now lenders are likely to slash both deposit and loan interest rates soon.

They expected the central bank’s rate cuts would also help banks facing liquidity problems.

But some analysts expressed reservations saying it was too early to predict the outcome of the rate cuts because the central bank’s key interest rates had for years had only a modest effect on the economy.

Besides, a cut of 0.25 percentage points was too little to affect the economy considering the current interest rates, they said, implying they would like to see further cuts in the near future.

Financial mechanisms urged to support start-ups in Vietnam

Financial mechanisms urged to support start-ups in Vietnam

Prime Minister Nguyen Xuan Phuc has asked for financial mechanisms to be built to attract investment into start-ups and innovation activities from both the country’s inside and outside resources.  

When will the second unicorn startup appear in Vietnam?

When will the second unicorn startup appear in Vietnam?

The startup ecosystem has been developing very strongly over the last 15 years, but no other unicorn startup has appeared, except VNG, which was valued at $1 billion in 2014.

VNS

 
 

Other News

.
Boeing to bring more technologies to local airlines
Boeing to bring more technologies to local airlines
BUSINESSicon  18/10/2020 

To cope with the COVID-19 pandemic, Boeing has sped up its ecoDemonstrator programme to support its partner airlines, including those in Vietnam.

VN has been active as foreign companies plan investment relocation
VN has been active as foreign companies plan investment relocation
BUSINESSicon  18/10/2020 

Vietnam has been seen as an ideal destination for foreign companies looking for elsewhere to relocate production channels in a bid to diversify their supply chains in the post-Coronavirus pandemic.

Exploitable security plagues digitalisation
Exploitable security plagues digitalisation
BUSINESSicon  19/10/2020 

Disruptive technologies spur the evolution in the financial landscape, with comprehensive applications providing convenient access to customers’ banking needs.

New FTAs puts logistics in limelight
New FTAs puts logistics in limelight
BUSINESSicon  19/10/2020 

New-generation free trade agreements are increasing the importance of domestic logistics groups, with Vietnam emerging as a safe yet high-return market for overseas parties pouring money into new developments.

MoIT helps enterprises deal with increasing trade remedy cases
MoIT helps enterprises deal with increasing trade remedy cases
BUSINESSicon  17/10/2020 

Vietnam’s export goods face more trade remedies in the process of deep economic integration, so the Ministry of Industry and Trade has developed solutions for the situation.

ASEAN pushes forward with 5G connectivty cooperation
ASEAN pushes forward with 5G connectivty cooperation
BUSINESSicon  17/10/2020 

As ASEAN chair this year, Vietnam is playing a crucial role in further cementing joint activities within the bloc via boosting the application of high technologies to adapt to Industry 4.0, which is sweeping throughout the region.

Macadamia nuts ripe for billion-dollar expansion
Macadamia nuts ripe for billion-dollar expansion
BUSINESSicon  19/10/2020 

Vietnam wants to earn around $1 billion from growing macadamia by 2030, and although some plantations have achieved partnerships with domestic buyers, 

Real estate stocks await cash flow
Real estate stocks await cash flow
BUSINESSicon  17/10/2020 

Domestic and foreign capital flow is expected to bolster real estate shares after the COVID-19 pandemic as many investors are paying attention to the industry.

Online exports require professionalism
Online exports require professionalism
BUSINESSicon  17/10/2020 

Using online platforms to boost exports is the fastest way to bring Vietnamese goods to the world, said business leaders and industry experts.

Vietnam to become the 4th largest economy in Southeast Asia: IMF
Vietnam to become the 4th largest economy in Southeast Asia: IMF
BUSINESSicon  17/10/2020 

Vietnam's GDP is estimated to reach US$340.6 billion this year, making it the fourth-largest economy in Southeast Asia.

Long Thanh Airport: investment rate high, ACV may lack money
Long Thanh Airport: investment rate high, ACV may lack money
BUSINESSicon  19/10/2020 

The Ministry of Finance (MOF) has warned about problems with the Long Thanh International Airport project, citing capital arrangement capability.

The dark future of hotels on 'golden land' in Hanoi
The dark future of hotels on 'golden land' in Hanoi
BUSINESSicon  18/10/2020 

A series of hotels have had to cancel their opening plans this year because of Covid-19. Many hotels have been put up for sale because of poor patronage.

Special day for two billionaires: mountains of money pouring in
Special day for two billionaires: mountains of money pouring in
BUSINESSicon  18/10/2020 

Techcombank share prices have soared, while the Hoa Phat Group of the billionaire Tran Dinh Long has reported a record 30-year profit. The prosperity of these enterprises has helped their owners earn more money despite Covid-19.

Many hoteliers intend to divest capital due to heavy losses
Many hoteliers intend to divest capital due to heavy losses
BUSINESSicon  16/10/2020 

Over the past eight months, hotel room tariffs have plunged and hotel room occupancy rates have remained low, forcing several hoteliers to divest capital with many financially weak hotels in the local market being put up for sale.

Meeting expectations of the corporate bond market
Meeting expectations of the corporate bond market
BUSINESSicon  16/10/2020 

A new government decree tightens conditions on the issuance of corporate bonds. However, before the decree came into effect, enterprises flooded the market with new issuances.

M&A activities signal promising fortunes
M&A activities signal promising fortunes
BUSINESSicon  17/10/2020 

Although merger and acquisition levels dropped in 2020 across Vietnam, the prospect for such activities remain bright for next year as overseas investors look to local businesses in order to improve market access.

Thai billionaire, European brewer lose money in Sabeco investment deal
Thai billionaire, European brewer lose money in Sabeco investment deal
BUSINESSicon  16/10/2020 

The Sabeco price has seen a strong recovery in the last half a year, but is still at a low price. Both Thai billionaire and the big brewer Heineken have lost money because of the drop in Sabeco share price.

Investors lose billions of VND as land prices keep rising
Investors lose billions of VND as land prices keep rising
FEATUREicon  17/10/2020 

A lot of real estate traders have missed opportunities to make huge profits because they decided to postpone purchasing plans, hoping that prices would decrease further.

Salary increases in 2020 lowest in 10 years: survey
Salary increases in 2020 lowest in 10 years: survey
BUSINESSicon  16/10/2020 

Salaries increased by 6.5% this year at multinational companies (MNCs) and 5.2% at Vietnamese companies, and are forecast to increase by 7 per cent and 7.7% next year, according to the Talentnet – Mercer Total Remuneration Survey.

The right structural adjustments help Vietnam achieve long-term growth aspirations
The right structural adjustments help Vietnam achieve long-term growth aspirations
BUSINESSicon  17/10/2020 

No nation has escaped the threat of COVID-19 to lives and livelihoods, with many countries seeing cases resurge recently. 

 
 
 
Leave your comment on an article

OR QUICK LOGIN