Mr. Nguyen Manh Dzung, Head of the Vietnam & Thailand Office of CyberAgent Ventures, spoke with VET's Nguyen Quynh about the challenges for and the potential of the sharing economy model in Vietnam.
■ How do you see the potential of the sharing app model in Vietnam compared with other countries in the region?
Model sharing (the sharing economy) is not new because it has long existed in many countries around the world, such as the US and Japan. It has only really boomed and become known in recent times, however, as big names such as AirBnB and Uber have appeared and the use of smartphones has grown. The model is spreading rapidly from developed countries to developing countries, including Vietnam.
The purpose of startups is to find solutions that increase value added as efficiency (productivity gains, reduced costs) and utility make use of available resources not being fully exploited and reduce waste in society. Therefore, the model of sharing apps will inevitably exist in Vietnam and startup businesses will develop strongly in the future and for the long term. Currently, businesses overseas have succeeded with the model and are looking at Vietnam to take advantage of the aforementioned potential, such as AirBnB, Uber, and GrabTaxi. Startups in Vietnam now have also taken the model on board, combined with an “on-demand” function that provides services by request.
■ Most projects in sharing apps are startups so there is a lot of risk involved. How does CyberAgent Ventures assess projects prior to deciding to pour in capital?
A few years ago companies such as AirBnB, Uber, and GrabTaxi were also startups, but have now become multi-billion dollar companies. Uber has been valued at $55 billion, AirBnB $25 billion, and GrabTaxi $1.8 billion. Their success today is due to investment and strong support from venture capital (VC) funds. The significant thing about these funds is their investment in new ideas from startups that create new services or solve problems in new ways to create value. And we all understand that VC funds accept the risk, but when successful they get their just rewards. Therefore, as a VC fund, CyberAgent Ventures is looking for ideas that can improve and bring greater value to the community and society, and we accept the risk of failure. We are actively targeting such projects.
There are several sharing models and on-demand models, such as Taske (finding maids) and Ahamove (finding trucks for transporting goods), and other ideas relating to the medical field.
■ What are the advantages and difficulties for startups pursuing the sharing economy model in Vietnam?
The model is not new in the world but is still quite new in Vietnam, and implementation requires a lot of money and a good operating team. Because the sharing economy uses advanced technology to boost a traditional industry and improve economic efficiency for the parties involved and is a pioneer in breaking the old rules and training the market by educating users, startup businesses must have large financial capacity or be capable of calling on capital. This, however, is not easy for Vietnamese enterprises.
■ Can you tell us more about CyberAgent Ventures’ plans in Vietnam in the future?
CyberAgent Ventures came to Vietnam at the end of 2008 and has invested in more than 15 companies, including familiar names such as Foody, Tiki, Vatgia, Bao Kim, batdongsan, NCT, CleverAds, Websosanh, Vexere, and DKT. In August we officially established our second fund, with $50 million, for the Southeast Asian market, including Vietnam. In the time to come we will continue to seek and support potential startups in Vietnam. There are currently two startups receiving investment commitments from CyberAgent Ventures, including one implementing a sharing app model and one that is still in the process of establishing and developing its product.