The Vietnamese government is reportedly drawing up policies for crowdfunding in the country, where many young companies are still struggling to get sufficient funding despite an increased interest in local startups in recent years.
Singapore-based financial news website DEALSTREETASIA said on Monday that the Ministry of Planning and Investment is currently taking feedback from local startups, before the policy framework is finalized.
Currently, Malaysia is the only country in the Southeast Asia to set up legal framework for the activity, it said.
Vu Anh, founder of crowdfunding platform Fundstart.vn, was quoted as saying that Vietnam’s startup ecosystem has a market gap as far as funding goes, which places local startups at a risk of failure due to the lack of funding.
Anh did not elaborate about the “gap”. In fact, very few local startups have revealed their values publicly.
A study released by angel investor network Hatch! last year end, however, showed that while Vietnam boasts one of the region’s rare unicorns technology company VNG, most of known startups like online retailer tiki.vn and job website VietnamWorks are among the group with values ranging US$10-40 million.
Internet company VC Corp and e-commerce website Vatgia.com boasted the values of $75-150 million.
Some experts also believed that a very young generation of companies have their values estimated between $1-5 million.
According to IDG Ventures Vietnam, nearly 80 percent of local startups failed within the first three years since establishment.
With the government recently paying more attention to startups, Anh said he hoped that young companies will have more access to better opportunities
Since IG9, the country’s first crowdfunding platform, was launched in 2013, several crowdfunding websites have been established in Vietnam. Meanwhile, some startups have raised funds through overseas platforms like IndieGoGo, the news report said.