Startups

Touchstone founders possess in-depth knowledge about startup and investment

Touchstone is founded by Khanh Tran, former founding partner of VinaCapital Ventures – one of Vietnam’s leading investment management firms – and successful serial entrepreneur Tu Ngo, co-founder and chairwoman of YOLA Education.

Touchstone aims to be a leading early-stage VC investor in Vietnam’s fast-growing technology ecosystem. With a young population of nearly 98 million and with 75 per cent of people of a working age, Vietnam is uniquely poised to capitalise on a demographic and digital dividend in a post-COVID world.

Touchstone aims to be a leading early-stage VC investor in Vietnam’s fast-growing technology ecosystem.

The country is teeming with entrepreneurial energy, fuelled by a large base of local technical, engineering, and corporate resources, as well as a healthy surge of returnees after years of education and work abroad, eager to chart their own destinies and build the future of Vietnam. With more than $2 billion in startup funding in the past five years, Vietnam’s technology ecosystem is now at an important inflection point, with a large, growing, and internet-savvy middle-income population, a conducive environment for innovation and technology adoption, and stable government policy coming together at the right time.

The first steps of the entrepreneurial journey can often be the hardest and Touchstone is well-positioned to be the local go-to partner for founders in Vietnam.

The fund supports founders through local insights and access, coupled with a global network and reach that resonates with the founders’ needs and aspirations. Sectors of interest include fintech, real estate, healthcare, edtech, and technology that enhances efficiency in major Vietnamese value chains like manufacturing and agriculture.

Khanh Tran and Tu Ngo, Touchstone founders

Khanh Tran graduated from Nottingham University with a BEng and MSc degree in Electronic Communication and Computer Engineering. He was among the pioneering founders of VinaCapital Ventures and is a strategic advisor to Vingroup after stints at Goldman Sachs and Grab.

Tu Ngo, a Stanford alumna, is a well-respected serial entrepreneur in Vietnam’s startup community. Tu founded and built YOLA into a market leader in hybrid online and offline English training in Vietnam.

She also helped found ELSA, an edtech startup building an award-winning AI app that teaches pronunciation. Khanh and Tu met during their MBA programmes at INSEAD where they shared a common vision of leveraging their investment, operations, and founder experiences to back the next generation of founders in Vietnam.

“With Touchstone, we want to be a force for positive social development and to set high standards for venture investing in Vietnam,” said Khanh Tran, managing partner of Touchstone. “We will play a key role in supporting startups, prioritising long-term co-operation, fairness, transparency, and mutual respect. We’re grateful to be supported by a group of prestigious institutional investors and financial institutions such as Pavilion Capital and Vulcan Capital who believe in the potential of Vietnam and of Touchstone.”

Tu Ngo, general partner, added: “Having been a founder for more than 10 years, I understand how hard yet meaningful it is to turn ideas into reality. There are gaps in Vietnam that when addressed, we can help founders to go faster while focusing on the right things. Khanh and I have a bias for product-driven teams and we’re deeply passionate about supporting our founders to succeed. Touchstone is our way to show the world that scalable innovation and real impact can happen in Vietnam and can be built by our very own.”

The Touchstone team is rounded out by several key executives with vast experience in the local and international markets. Nam Le, principal, has previous experience at McKinsey, Morgan Stanley, Galaxy Studio, YOLA and Bobby Liu, director of EIR, was the founder of Hanoi incubator-led co-working space HubIT and Founders Institute Vietnam.

Every member of the Touchstone team not only possesses an in-depth understanding of the Vietnamese market and technology ecosystem but also brings a great amount of empathy and respect for founders and their teams. Touchstone is excited to unleash the next wave of Vietnamese technology startups and to help founders on their journey to build world-class companies that will serve Vietnam and beyond.

By Anh Duc

A lot of people were taken by surprise to know that Nghiem Tien Vien had resigned from a high-paying job to return to his hometown several years ago.

Many of them would like to ask him a question: why?

It is natural to raise the question, in fact.

Vien, a millennial, quit when he had a decent job with a monthly salary of around US$2,500, which would be a dream to many other people in Vietnam.

At the age of 31, Vien is the director of the Gostream Technology Joint Stock Company, one of the seven most excellent startups of Vietnam which participated in Techfest 2019 in Silicon Valley in the U.S.

Gostream managed to raise $1 million in its Series A funding round from the local Vinacapital Ventures Foundation previously.

Facebook once listed it as one of 30 platforms that had been live-streamed most in the world in 30 days.

‘I can do it more simply’

Vien was offered a job as a technical manager in a U.S. company based in Vietnam with a salary of $2,500 a month after he graduated from the Hanoi University of Science and Technology several years ago.

To many people’s surprise, however, he gave up the post to come back to his hometown and work for a newspaper as a technical manager.

While working there, Vien had to do a lot of tasks related to live-stream activities.

He found it uncomfortable to use existing tools and apps that were available on the market then.

“It can be improved. I can do it more simply, why did others make it complicated like that?” Vien wondered to himself.

Vien nurtured the idea for one year before launching a startup offering a technical solution named Gostream.

The app helps users save time by using recorded and edited videos in live-streaming.

Gostream was put in the spotlight virtually immediately after being unveiled, thanks partly to meeting the growing demand of many sellers online at that time in Vietnam.

Being inspired from the first success, Vien continued to introduce a new product, Gostudio, an app that provides users with a tool to live-stream interactively on such popular social media platforms as Facebook, YouTube, and Twitter with many unique features and functions.

“The platform can be used as a mini studio that allows you to add a logo, photos, characters, and videos to live streams,” Vien talks of some special functions of Gostudio.

“You can also operate it as a network of television channels and invite others to live-stream videos from anywhere they have got a connection.

“You can use two cameras from two different corners to flip scenes during a live stream, which is really the same as a real studio.

“Gostudio, however, is easier to use because you can utilize smartphones instead of cameras.”

In the context of the novel coronavirus (COVID-19) pandemic, Gostudio soon became a household name because of a growing demand for virtual meetings and conferences and its capability to cope with the demand domestically and internationally.

“The pandemic turned out to be an opportunity for us and we tried to engage with investors,” Vien told Tuoi Tre (Youth) newspaper.

“They were so persuaded by our existing products that they were willing to invest in our projects in 2021.”

Gradually conquering global market

Three years ago, Vien chose the north-central province of Nghe An, his hometown, as a starting point for making Vietnam recognized on the world’s ‘technology map.’

However, Hanoi and Ho Chi Minh were two only cities whose startups could attract investments at that time.

Vien acknowledged that his decision to choose Nghe An to launch a startup was driven by financial considerations.

He only needed to spend a much smaller amount of money than his peers do in other big cities like Hanoi or Ho Chi Minh City paying for office rent or equipment.

This helped Vien’s enterprise hold on for a longer time to have their first client.

Vien had to deal with human resources as well.

“It is very difficult to compete with major companies,” Vien acknowledged.

The young businessman became a headhunter in his own hometown, looking for potential employees who live and work in the local community and training them for the company.

Apart from setting up a head office in Nghe An, Vien chose a co-founder to be a leader to work with investors in the southern region on his behalf in Ho Chi Minh City.

“Our products are sold via the Internet; we work mainly on the web so where our company locates would not matter,” the millennial explained.

“That is why I chose my hometown, Nghe An, to make my dream come true.

“When our products get well known, it would not matter to investors where our company is based.”

The first steps are always the hardest. This is not different to Vien, who experienced a challenging phase during the very beginning stages with the startup.

Vien took three to four jobs at the same time, including product development and customer service.

Sometimes Vien had to stop eating to fix some errors after receiving a call from his customers.

Vien and his co-workers found the right direction despite encountering many obstacles.

Gostream has become a popular choice amid the increasing demand for selling goods online in Vietnam.

There are more customers who look for the company’s products, as its brand name has become more recognizable.

“Our subscription plans are various, from VND100,000 [US$4.3] to millions of Vietnamese dong per month depending on the client’s demand,” said Vien.

“The customers are willing to pay the fee as long as they are well served in their business goals.

“There have been more than 700,000 Gostream subscribers to date.

“There is an average of 10,000 active users daily, which includes around 50,000 live streams.”

Gostream’s revenue in 2020 was around VND15 billion ($650,000), which created jobs for a team of 40 young employees.

“We are in the process of perfecting Gostudio, making some new improvements to make it suitable for foreign markets,” Vien talked about the ongoing plans.

“We set a goal of entering the Southeast Asian market in the first half of this year.

“In the second half, we will conquer markets in the U.S. and Europe.”

Thanks to the excellent achievements in the startup industry, Vien was included in the list of Vietnam’s 10 most outstanding young faces of 2020.

This year, Vien will be Vietnam’s representative to compete in the ‘Startup World Cup 2021,’ which will be held in the U.S. on November 11.

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Making capital investments is usually thought as intended for well-off people or bankers only, but Kendrick Nguyen, an American of Vietnamese origin, has launched an easy investment platform where anyone can invest amounts as small as a few hundred thousand Vietnamese dong.

Over the past several years, 39-year-old Nguyen has become a familiar face of the annual National Festival for Innovative Startups (Techfest Vietnam), hosted by the Ministry of Science and Technology to support the Vietnamese startup ecosystem.

As the co-founder and CEO of Republic (Republic.co), an investment platform connecting tech startups and blockchain projects with global investors, he hopes Republic will develop into a unicorn with billions of U.S. dollars and become a leading platform for crowdfunding.

Playground for all

Nguyen co-founded Republic in 2016, after he left the position of chief attorney of the venture investment fund AngelList, which is behind five unicorn companies, including Uber.

Republic offers the lowest limit of investments compared to other crowdfunding platforms.

Accordingly, with only US$10, anyone can invest in any company on this platform.

It is as easy to make investments using the Republic platform as buying items at shops, he said.

“When you like a certain company and believe it will be successful, you can invest $10-20 using a credit card,” the entrepreneur added.

“Such investment is quite different from goods purchased in that if the investee operates successfully, the $10 you have invested may grow up to $100, $1,000 or even millions of dollars, just like in the story of Facebook or Tesla.”

If the investment fails, the investor will lose the money, the young CEO added.

With such an affordable and convenient investment method, Republic could raise $36 million in Series A in the U.S. and has grown rapidly over the past year, attracting over $300 million from more than one million investors.

With his Republic platform, Nguyen asserted that deciding on choosing which company to invest in, as well as considering which industry to be useful in the future, has no longer been the prerogative of any bank or billionaire or financial empire, but of the general public.

Future of $10 investment

“Crowdfunding will become an inevitable trend,” the Vietnamese American said, adding that the future of society is that everyone will be investors and will own part of the services and products for which they are also customers.

When a person invests in a company like Uber, they will call an Uber car.

When they are interested in environmental issues and invest in a café chain using environmentally-friendly recycled products, they will become among the clients of such chains, the entrepreneur explained.

He said he is confident that the crowdfunding market will increasingly develop, even without his platform.

“My aspiration is for Republic to be a leader in that market,” the executive said.

“After five years, the Republic platform has more than one million registered investors with a total investment of more than $300 million into over 300 enterprises.”

At this time next year, the total investment will exceed $1 billion and after 10 years, the figure will reach $1 trillion, the Republic co-founder said.

Toward Vietnam

As an American with Vietnamese ancestry, Nguyen said he finds it easy to make connections with his homeland, where he has identified what fields he should invest in.

“A desire to make contributions to the homeland’s development is a thing of common sense,” said the platform CEO, who left Vietnam when he was in elementary school.

Nguyen, who earned a PhD from Boston University in the U.S., taught at the Ho Chi Minh City University of Law in 2011-12, and has become a regular Techfest guest speaker since 2016.

The entrepreneur, who can speak Vietnamese fluently, said he is seeking opportunities to support a number of potential Vietnamese startups on the Republic platform through cooperation with VietChallenge, a non-for-profit organization.

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Illustrative photo

Pandemic still unrelenting

Exactly a year ago, at the beginning of April 2020, more than 97 million Vietnamese people implemented Directive 16 of the Prime Minister. Specifically, social distancing was conducted for fifteen days to fight and contain the Covid-19 pandemic. A week earlier, on 27 March, as per Directive 15, the Government expressed an extremely important anti-pandemic viewpoint which stated that we must be prepared to face economic losses to prevent the pandemic from spreading, as protecting lives was a far more important prerogative of the Government.

At that time, the choice between protecting the health of people or saving the economy was a difficult choice for most countries in the world, when the outbreak of the Covid-19 pandemic caught the whole world by shock and surprise. Many developed countries such as the US and the EU have made serious mistakes since, and are paying a very heavy price by choosing to maintain economic activities as normal and cope with this serious pandemic with the hope of a herd immunity setting in.

This policy decision has had severe and drastic consequences, with an unstoppable rise of infections, a skyrocketing death toll, and a nearly paralyzed economy. More importantly, these countries have missed out on golden opportunities to effectively localize and control infections and quell the rate of people succumbing to the disease. Until now, more than a year after the outbreak, with vaccinations underway in many communities, the pandemic is still recurring and fear is quite palpable across regions.

The year 2020 ended with the world economic growth map in red and a lurking recession, and only a few rare blue spots showed over countries that still maintained a positive growth rate, of which Vietnam was one. Vietnam’s economic growth rate in 2020 was 2.94%, and although it was the lowest growth rate in the past few decades, it was what most powerful governments in the world even failed to achieve.

FDI maximum in Ho Chi Minh City

In the context of a raging pandemic, the economic growth of Ho Chi Minh City reached 1.39%. Although this is the lowest growth rate in the economic history of the City, in the uncertainty of economic activities in 2020, this is an extremely impressive result. After the first wave of the pandemic broke out and the country had to implement lockdowns of infected areas as per Directive 16, Ho Chi Minh City has had to see more than 5,500 businesses shut down, and the painful loss of jobs for hundreds of thousands of workers.

As the country’s main economic hub, Ho Chi Minh City has always made great efforts and taken great strides. Many practical and effective solutions were drastically implemented to ensure economic success. Chairman Nguyen Thanh Phong admitted that 2020 was the most difficult year, when the economy of Ho Chi Minh City grew by 1.39% for the first time and more than 32,000 businesses were dissolved or temporarily shut down. Nonetheless, Ho Chi Minh City promptly supported those in difficulty, ensuring 100% implementation of their support plan with a VND 600 bn package; extending tax period for businesses with around VND 8,800 bn; and extending about VND 200 bn of value-added tax, personal income tax, and land rent of small business households.

The result brought many positive signs in the economy in Ho Chi Minh City, even though 2020 was an extremely traumatic and excruciating year. Exports are still at around US$ 44 bn, and around US$ 4 bn has come in foreign investments, with the City leading in the maximum number of FDI. Many businesses have dissolved or gone bankrupt or put on hold, but on the other hand there are about 40,000 newly registered businesses now, with around 8,000 businesses currently making efforts to resume operations.

Improving investment environment

In the first three months of 2021, the economy of Ho Chi Minh City marked many positive changes, even though it was severely affected by Covid-19 infectious cases at Tan Son Nhat airport during this time. By following effective and drastic application of Directive 16, the negative impacts on the City’s economy were minimized, except for a number of service sectors that are still heavily affected.

Ho Chi Minh City budget revenue in the first two months of 2021 reached around VND 74,000 bn, accounting for 20% of the total budget revenue for the whole of 2021, and equivalent to VND 2,900 bn per day. Other socio-economic development indicators also showed positive growth over the same period. Total retail sale of goods and services increased by 4.7%, commodity retail trade by 11%, export turnover reached US$ 8 bn, up 25%, and three times higher than in the same period last year.

On the morning of 31 December 2020, Ho Chi Minh City announced Resolution 1111 of the 14th Standing Committee of the National Assembly on the establishment of Thu Duc City directly under the governance of Ho Chi Minh City. Thu Duc City will be a knowledge based economic city, a highly creative and interactive urban area, which will be a driving force for economic breakthrough for Ho Chi Minh City.

To undertake this mission, in addition to the existing infrastructure such as High-Tech Park, University Village, Thu Thiem New Urban Area, Financial Center of Vietnam, in coming time, Thu Duc City will continue to invest in important social and technological infrastructure to become the largest creative startup center in Vietnam with Quang Trung Software Park. It will be the most modern high-performance computing center with supercomputers in ASEAN, with also an International Fair Exhibition Center and the Rach Chiec Sports Complex.

Therefore, the demand for investment capital will be very large and is considered a key task by Ho Chi Minh City in 2021. The achievements from socio-economic stability through successful anti-pandemic efforts, production and business activities, and by adapting to uncertainties caused by the pandemic, Ho Chi Minh City will work to strongly improve the quality of the investment environment. A safe and effective investment environment will help in attracting capital flow. In this effort, Thu Duc City will act as the center for capital inflow for urban infrastructure, creative space,  science and technology development, and eventually become a vital AI center of Vietnam.

Asso. Prof. Dr. Nguyen Khac Quoc Bao, University of Economics, Ho Chi Minh City