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US$1 Billion Ready To Pour In Vietnam

IDG Ventures Vietnam established in December, 2004 and it belongs to the American International Data Group (IDG). The ventures fund has expanded new investment channel in Vietnam when they have invested in 16 companies with total capital investment of US$25 million to date and ready to pour US$1 billion in Vietnam by the year 2013…

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IDG has been investing in some other Asian countries such as China, Korea, and India and has gained certain amount of achievement. IDG Venture, set up in China in year 1992, which has invested in 200 companies with total capital investment of US$800 million and has gained encouraging profit of 52% and the most striking thing, is that to solve jobs for 25,000 people.

IDG has made its initial investment capital of US$100 million in Vietnam. They set priority to invest in individual companies in the field of information technology, software development, telecom infrastructure and service, technology production and bio-technology. IDG Ventures Vietnam so far has invested in 16 companies with total investment capital of US$25 million, some companies has firm position in the market such as iSphere(software production), PeaceSoft (E-commerce trading), VinaGame(online game), VietnamWorks( online human resources supply).

From now on to the end of this year, IDG Ventures shall invest in 6 and 8 more enterprises with estimate investment capital of US$12 million.

Mr. Nguyen Bao Hoang, General Managing Partner of IDG Ventures Vietnam, said that they have received 100 projects calling for investment every month but the same criteria as other countries, only 1% projects are selected against registered one. The most weakest point of denied projects are the factor of human that means the capacity of enterprise management and the invested projects have developed fairly well to date even some companies received US$1 million investment capital but the capital has increased 10 times after 3 years.

Mr. Patrick Mc Govern, Chairman of IDG, points out that IDG has had 10-year plan in Vietnam. From now to the year 2008. They shall invest about US$300 million. Later on, IDG will re-evaluate the process of investment and simultaneously stake in more US$700 million for Vietnam market.

Although there are several steps of market survey but the operations of investment funds remains considerate in Vietnam including recent investment of IDG Ventures Vietnam. According to the economic analysts, the core issue lies on the implementation of intellectual property right has not been carried out efficiently, in addition while local enterprises need big capital inflow, local sources can not meet this demand, foreign investors are just allowed to buy shares, contributing capital with limited ratio to Vietnamese enterprises so it reduces chance of collaboration. It also means that the voice of investors is restricted at certain level in decision making of strategic business development of the enterprise.

The feature of investment funds aim at start-up companies. It could be considered as the brave as investment making in them and other thing need to mention in the Government’s decree on regulation of “High-tech Zone Park” has not stipulated about the structure and preference for the investors to establish fund in Vietnam. The mode of investment of IDG as foreign investment fund to prove these.

Mr. McGovern concluded that “ when investing in Vietnam, the most important thing is that they do not just simply bring money in, they offer opportunities to transfer technology, invite foreign investors come to this country ”.