Ho Chi Minh City The dream of a technology unicorn city, with billion-dollar businesses

DNHN - Ho Chi Minh City must "lay in" a road to build a technology "unicorn" city amid a very difficult economic period such as the present. To realize this goal, Ho Chi Minh City must attract technology entrepreneurs and workers from around the globe.

To realize this vision, Ho Chi Minh City must attract global technology talent to start-ups and implement attractive incentive mechanisms and policies.

At the end of the first quarter of 2023, Ho Chi Minh City's GRDP (gross regional domestic product) increased by 0.7%, the smallest increase among the five centrally administered cities. This number stunned Ho Chi Minh City officials and experts. How can Ho Chi Minh City regain its position as the economic engine of the nation? That is the digital economy, and building Ho Chi Minh City into a "technological unicorn" with digital enterprises with over $1 billion in capital is one of the ways to return Ho Chi Minh City to the top of the country's economic ship.

Future Ho Chi Minh City’s growth and development will be driven by the digital economy.

Ho Chi Minh City has opened technology forums in recent years, such as the seminar "Digital Economy - Prospects and development orientation in Ho Chi Minh City" hosted by the Institute for Research and Development of Ho Chi Minh City (HIDS). The Ho Chi Minh City Economic Forum 2022 will be held on April 15, 2022, with the theme "Digital economy: The driving force for growth and development of Ho Chi Minh City in the future" for tech unicorns.

According to HIDS experts, the size of Ho Chi Minh City's digital economy accounts for approximately 14.41% of the city's total GRDP, which is estimated at 8.27 billion USD (approximately 191,768 billion VND). Ho Chi Minh City's digital economy objective will account for 25% of HCMC's GRDP by 2025 and 40% by 2030.

Ho Chi Minh City's Director of the Department of Information and Communication (TT-TT), Lam Dinh Thang, stated that the city's ability to develop a digital economic ecosystem is contingent on several factors, with interdependent relationships forming the digital economic system. ecology of the digital economy, including data, capital, people, public sector, private sector, digital culture...

Ho Chi Minh City has the advantage of having one of the highest concentrations of smartphone users. The entire city is covered by fiber optic network infrastructure, broadband Internet, and 4G and 5G mobile infrastructure.

Shortly, Ho Chi Minh City views the requirements of the digital economy as the driving force for its development. The Ho Chi Minh City Economic Forum 2022 will be held on April 15, 2022, with the theme "Digital economy: Growth engine and future development of Ho Chi Minh City" This special forum is attended by foreign managers and leaders from nine countries, including the United States, Russia, Japan, Finland, Israel, Thailand, Switzerland, and Australia, as well as economic experts and digital economy, businesses...

Ms. Carolyn Turk, World Bank (WB) Country Director for Vietnam, stated at the Forum that investment in the digital economy increases productivity and economic growth, particularly economic growth. In the context of difficulties and disadvantages, such as the recent Covid-19 epidemic, promote stable growth.

According to Ms. Carolyn Turk, countries that have heavily invested in the digital economy have demonstrated quite prompt and proactive responses to the pandemic in the past. She also praised the digital transformation and development of the digital economy in Vietnam and Ho Chi Minh City, especially given that Vietnam, which has thousands of start-ups and digital infrastructure, has a relatively strong technology background.

Mr. Truong Gia Binh, chairman of FPT Company's board of directors, stated that all localities in the country are currently discussing digital transformation, with Ho Chi Minh City being the leader in many fields of digital transformation. Information technology applications. Mr. Binh suggested that shortly, colleges, universities, and even high schools in Ho Chi Minh City should implement artificial intelligence-related coursework. The objective is to cultivate a large pool of scientific and technological talent.

The "unicorn" facial features

In 2014, the Vietnamese game Flappy Bird, created by Nguyen Ha Dong, sparked a global uproar with more than 50 million downloads, inspiring the emergence of other technology "unicorn" businesses in Vietnam, thereby increasing the attractiveness of these businesses. Including the founding team of Sky Mavis, young people have faith in Vietnamese wisdom. Three out of five of the company's founders are Vietnamese, with Ho Sy Viet Anh serving as chief technology officer (CTO) for SkyMavis and co-developing a blockchain game project called Axie Infinity in October. August 2018.

With many ups and downs in a startup, Viet Anh and his young colleagues overcame many obstacles, allowing Sky Mavis to regain its strength and continue to raise 150 million USD in the capital, bringing the startup company to life. Too rapidly expanding to become a Vietnamese technology "unicorn" offering infrastructure and strategic consulting to global game developers.

Sky Mavis is the youngest technology "unicorn" in Vietnam, with a valuation of more than USD 3 billion. In 2021, Vietnamese technology start-ups set a record for investment capital of up to USD 1.4 billion, making Vietnam the official owner of four technology "unicorns" and the region's third-ranked country. Southeast Asia, including VNG, Sky Mavis, VNLife, and M Service, is worth over $1 billion. VNG and Sky Mavis are prominent online game industry brands. VNLife and M Service are the market leaders in payment gateways and e-wallets, with their VNPAY and Momo products gaining popularity among Vietnamese and international consumers.

The pursuit of "unicorn" status is a top priority for startups. Reaching the "unicorn" threshold indicates that the startup has grown to a large scale and value, attracted significant investment capital, and established its position and brand in both the domestic and international markets. Nonetheless, becoming a "unicorn" star is not simple.

Numerous start-ups are approaching "unicorn" status, such as Tiki, Economical Delivery, Fast Delivery, and Trusting Social... all of which have grown extremely rapidly in recent years due to a capital increase. customary.

Tiki has the most potential to become the next "unicorn" company in Vietnam. Tiki was valued at 832 million U.S. dollars in October 2021, following a successful funding round in which it received an investment of up to 240 million U.S. dollars, and was approaching the $1 billion mark.

Tran Ngoc Thai Son founded Tiki in 2010 as an online book-selling platform, inspired by Amazon's Jeff Bezos. Currently, Tiki has approximately 4,000 employees and 20 million registered users. Specifically, the Tiki e-commerce platform with nearly 30 product categories, the TikiNOW Smart Logistics supply chain with 20 operation centers and warehouses with a combined area of nearly 80,000 square meters, and the TikiNOW Smart Logistics supply chain with 20 operation centers.

Tiki plans to conduct an IPO in the United States between now and 2025 at the latest. Tiki will undoubtedly be the next technological "unicorn" if it is successful.

What are the prerequisites for becoming a "unicorn"?

MoMo Vice President Nguyen Ba Diep stated at a technology forum that a startup must do things that no one believes are possible. Creativity must be unique because if a product is well-known and simple to produce, it will be exceedingly difficult to achieve success.

"MoMo's development has spanned 15 years, but for the first decade, no one believed this application could thrive. This was because smartphones were not particularly popular at the time. We met numerous individuals. Mr. Nguyen Ba Diep stated that the current era is fraught with numerous challenges.

According to the vice president of MoMo, for a technology start-up to become a "unicorn," it must create products that affect a large number of people and have very high technology content. In addition, financial management, control, and the allocation of cash flow are essential factors for startups.

Above all, high-tech content is required. Instead of copying as in the past, the current global trend for startups is to hold onto their core technologies to ensure future competitiveness. Creating a product that can be created sustainably requires more intelligence.

The retail and payment industries currently attract the most investment capital in Vietnam. Other industries, including finance, asset management, education, and lending, are also in the process of becoming the next trend.

According to experts, technology "unicorns" play a crucial role in attracting such large investments. The four "unicorns" we have are a crucial foundation for investment funds to concentrate on funding domestic startups. Therefore, the more "unicorns" one possesses, the more advantages a Vietnamese startup will have, particularly in terms of investment capital.

The Covid-19 pandemic, which has lasted for more than two years, has caused numerous "shocks" and negative effects, as well as numerous opportunities and positive effects, such as accelerating digital transformation and altering public perception of digital transformation.

During that very difficult period in Ho Chi Minh City, a medical technology startup with an application to purchase medicines on behalf of Medigo "closed" two rounds of investment capital totaling nearly USD 1 million. When Medigo collaborates with the pharmacy chain Phano Pharmacy to promote the provision of secure online drug-selling services, it continues to extend its success.

There is also an application of technology to sell bottles and waste sorting (VECA) that is also developing very rapidly, assisting traders in the 4.0 era to work more efficiently and easily, becoming an application that shortly, the amount of scrap mixed in the garbage will be equivalent to 10 billion VND per day; this number is estimated to be 60 billion VND on a national scale.

Convert the word count in school

According to the Deputy Minister of Information and Communications, Mr. Nguyen Huy Dung, the future of each city and nation begins with schools. Ho Chi Minh City should prioritize the digital transformation of schools, perhaps beginning with universities, and develop digital universities to train future digital engineers and bachelors.

As in the case of VECA and Medigo, digital transformation can result from small changes that have a significant impact on people's lives. These projects may contribute a small amount to the growth of Ho Chi Minh City's digital economy if they are successful and proceed in the right direction.

Philipp Rosler, former Deputy Chancellor of Germany and advisor to VinaCapital Ventures stated at the Ho Chi Minh City Economic Forum in 2022 that Ho Chi Minh City has the potential to become a "unicorn" city in terms of technology in the future.

To achieve the goal that by the end of three years, the digital economy will account for 25 percent of the city's gross regional domestic product (nearly double its current share), there are however still many significant obstacles to overcome. According to a World Bank study, only about 7% of digital enterprises in Vietnam have business activities determined by data collection and analysis, which is significantly lower than the regional average. This indicates that the digital transformation and development of the digital economy in Vietnam have not advanced sufficiently.

Mr. Philipp Rosler stated that Germany has a training and support system for the next generation in technology, which includes vocational training. Ho Chi Minh City can also begin training young people in technology through companies that can provide support and mentorship, thereby contributing to the digitalization of the economy.

Deputy Minister of Information and Communications Nguyen Huy Dung stated that Ho Chi Minh City should consider attracting technology talent from around the world to establish and work in Ho Chi Minh City as one of the most worthwhile things to do to develop the digital economy. Ho Chi Minh City with effective and alluring incentive policies and mechanisms. This is the most fundamental and quickest method for establishing a rapid and sustainable digital economy.

In the future, there will be numerous technological "unicorns"

According to the Asian Development Bank (ADB), Vietnam will produce a large number of technology "unicorns" in the future due to the policy's active support.

Vietnam is gradually becoming the "cradle" of start-ups in Southeast Asia as venture capital investments, particularly in the technology sector, increase. In the period between 2020 and 2022, the capital will reach nearly 2 billion US dollars, and it is anticipated that between 2023 and 2025, this number will reach 5 billion US dollars.

Luu Vinh Hy