The Euro 11-million ($11.7 million) Vietnam-Finland Innovation Partnership Programme (IPP) was one of the early acceleration support in Vietnam’s fledgling startup ecosystem.
In its second phase (2014-18), IPP has provided financial and capacity building support for 35 startups and ecosystem development projects across Vietnam. At the same time, under its Training of Trainers (ToT) initiative, IPP has trained 47 innovation coaches and lecturers on innovation and entrepreneurship.
Startups that have grown even beyond the local market as well as secured external funding include marketing automation app Beeketing, freelancer platform for mobile app outsourcing Applancer, online-education platform Smart Education Now of SEN Techs and coconut drinks provider Hamona.
As IPP nears an end next year, it aims to transfer Finnish innovation know-how to local Vietnamese partners, building a strong foundation for Vietnam’s next-generation entrepreneurs and promoting partnerships between Vietnamese and others, says Silja Leinonen, innovation expert of the programme.
DEALSTREETASIA talked to Leinonen about IPP’s exit strategy, which is to hand on the experience in creating sustainability for the ecosystem.
What are the new developments of grant-funded projects under IPP?
The projects have advanced quite well, particularly the five follow-on funded companies in 2016. In the beginning, we had 18 companies invested with a small seed fund (to the maximum of 30,000 euros in each firm). After that, we have granted the best five of those with scaling-up financing (to the tune of 100,000 euros each). The companies are big data analytics startup Abivin, Beeketing, hotel ERP service provider EzCloud, Hamona and SEN Techs.
These companies have also expanded into international markets and sought external investors with bigger funding rounds. They are anticipated to be showcases of how Vietnam can support growth potential companies and how the companies can themselves generate growth in international markets.
Also, altogether we have 17 ecosystem development projects, some of which are very strong in their region. They received similar grants to the startup projects. Some very strong networks have emerged not only from major business hubs, such as HATCH! Ventures in Hanoi and FabLab in Ho Chi Minh City, but also in the central region, such as DNES in Danang. Apart from the IPP-funded enablers, we have been working closely with other accelerators and ecosystem developers such as the Saigon Innovation Hub or SIHUB in Ho Chi Minh City, as well as with donor-backed innovation support initiatives such as ADB’s Mekong Business Initiative programme.
What kind of support have the projects delivered to the ecosystem?
Among the projects, DNES, for example, has launched activities that did not exist that much before in Danang. After receiving grants from us, they were able to form the consortium to implement their own projects to better serve local startups.
Meanwhile, many have organised events, expanded their networks or set up acceleration programmes, all adding to better services for Vietnam-based young companies.
Please tell us about IPP’s exit strategy.
I would like to call it a sustainability strategy, because it is investment for the future. We have developed some key products through our work with sub-projects.
The first one is the ToT programme, including ToT1 and ToT2.
ToT1 is for training innovation coaches who work directly with startups or ecosystem developers in building the capacity to innovate. ToT2 is to work with universities which train their students on innovation and building up a company.
We feel those areas really have a market demand in Vietnam. Some have already generated concepts similar to IPP’s ToT concept on their own, and we aim to work with the most capable partners to continue to replicate the training after IPP has come to an end.
The second key product is a set of funding instruments. The two-phase open call grant instruments enable pre-call activation to identify cases with strong potential, transparent selection procedures in the evaluation process and phased investment based on achieving milestones. That is something we feel is missing from many Vietnamese financing organisations. So we plan to invite those who are interested to receive the knowledge and experience we have.
And the key aspect of the exit strategy is to continue helping in the transformation of Finland-Vietnam relations from ODA or aid-based collaboration to trade-based cooperation. It’s a big area in the sustainability phase to leverage what we have done in IPP for the benefit of institutional and business relations between Vietnam and Finland.
We are starting to outsource our main activities to capable commercial actors on the ground. With this we aim to create sustainable service models to continue supporting capacity building and partnership creation for the long term.
How do you see the current ability of Vietnamese universities in training entrepreneurship?
One of the reasons why we started ToT2 was that there was a clear need to improve education and training of entrepreneurship and innovation among Vietnamese universities. Only a few universities had pioneered in this area, but now we have trained and certified teams from 11 universities across Vietnam and are helping them take concrete steps in generating a better offering and in reaching out to the surrounding community. Many universities have not been working actively to engage their entrepreneurship community or to build international networks. Hopefully through the replication of ToT2 we can expand even more expertise in helping them explore further offerings.
What’s your assessment of the role of the Ministry of Science and Technology in supporting the startup ecosystem?
I can see a clear pivot in thinking in overall economic policies towards startups and innovation. Innovation is really becoming a driver of how policies are formulated. We are very happy to see the government approve Decision 844 (a national investment and support scheme for startups by 2025), to which we contributed our part. We will continue to support the ministry in policy making towards a strong healthy startup ecosystem via training and business creation programmes where the Finnish experience and expertise can be utilised.