The dynamic start-up environment in Vietnam 

HSBC and KPMG have just released the Report “Emerging Giants in Asia – Pacific 2022”, which assesses businesses operating in the region’s new economic sectors with strong potential for impact on the global business landscape over the next decade.

In 2021, there were aroundt 3,800 startups in Vietnam – a double of that in 2019 when the Covid pandemic spread, four of which were unicorns and 11 were valued at over 100 million USD. Additionally, Vietnamese startups received more than 1.3 billion USD in investment the same year. Fintech was leading the race with a total deal value of 200 million USD. E-commerce came second with the most notable deal being 258 million USD Tiki in Series E.

Vietnam has emerged as a start-up hub, close to catching up with Indonesia and Singapore. With a young, dynamic and educated population, high internet coverage and smartphone usage, and proactive government support, Vietnam will continue to maintain its position as an attractive destination for both investors and technology companies, making this country a development cradle of potential unicorns in the near future

Mr. Tim Evans, General Director of HSBC Vietnam.

Mr Pham Tan Cong, President of Vietnam Chamber of Commerce and Industry (VCCI) also stated that “The Vietnamese government has made great attempts to improve the business environment in favor of start-ups”.  Ivo Sieber, the Swiss ambassador in Vietnam, agreed on the viewpoint, and added, “Entrepreneurial spirit and startup spirit should be nurtured in the educational system”. 

A successful start-up case in Vietnam 

One of the most prominent cases of home-grown start-up business is Coolmate, a men’s fashion brand that directly provides customers with products via e-commerce channels (D2C E-commerce). Founded in early 2019, Coolmate follows the D2C e-commerce model to cut distribution costs in traditional retail, bringing consumers 100% high quality made-in-Vietnam garment products at a reasonable price..

During the pandemic, Coolmate raised USD 2 million in a Series A financing round led by Access Ventures with the participation of Do Ventures, CyberAgent Capital, and DSG Consumer Partners. Coolmate is on track to reach the $19 million revenue mark in 2022, with revenue increasing more than three times per year.

After three years of operation, from a company with just over 2,000 purchase orders per month, Coolmate is now processing over 10,000 purchase orders per day. More than 50% of the daily purchase orders come from former customers.

According to the evaluation of KPMG and HSBC, the success of Coolmate is built on two factors:

Successful adaptation of their business model based on correct identification of market gap

The emergence of the Covid-19 pandemic has aided in the acceleration of the digital transformation process and has had a significant impact on online shopping behavior. According to the reports of Google, Temasek, Bain & Company, Vietnam’s e-commerce market growth was 53%, growing from USD 8 billion in 2020 to USD 13 billion in 2021, and it is forecast to gain USD 39 billion in 2025. Coolmate, which was founded in the midst of the online shopping habit boom, established a domestic fashion brand with distinct strengths in the context of strong and competitive e-commerce growth.

Aimed at the young users, Coolmate minimizes its product design with a focus on high-quality materials to maximize user comfort. Plus, advanced fashion technologies such as Excool, Anti-Smell, CleanDye, and HeiQ Viroblock are used to create environmentally friendly products.

Mastery of logistics channel and operation

Coolmate also developed an independent e-commerce website and a highly interactive website platform that enables the development of exclusive features such as smart size selection, size fit analysis, and a variety of payment methods. It covers both the customer experience factor and cost efficiency aspect. 

The brand also use the new capital for researching and product line extension with new materials, thereby enhancing the comfort for customers. Along with that, Coolmate is set to upgrade its operating system. The newer version can help the brand meet the packaging and delivery stages on a large scale. Besides, the investment is allocated to improve the workforce capacity, thus meeting Coolmate ‘s rapid growth rate.

“Coolmate is in the leading position in the field of fashion technology in Vietnam with the diversity and uniqueness in their business strategy”

Charles Rim, Managing Director at Access Ventures

Charles Rim, Managing Director at Access Ventures highly evaluated the brand “Coolmate is in the leading position in the field of fashion technology in Vietnam with the diversity and uniqueness in their business strategy”. The Managing Director also predicted that Coolmate will accelerate and grow significantly in the coming time with a new milestone in fund-calling. Thus, the made-in-Vietnam start-up will achieve its business goals and strengthen its position in the Vietnamese fashion industry. 

“Coolmate leadership team has a vision of the business model, optimal operating ability, and they always act decisively”

Le Hoang Uyen Vy, Managing Director at Do Ventures

“Coolmate leadership team has a vision of the business model, optimal operating ability, and they always act decisively”, said Le Hoang Uyen Vy, Managing Director at Do Ventures. Coolmate is set to continue to write inspirational stories of Vietnam’s fashion technology with the help of investors and a talented executive team.

Vietnam’s young generation is full of ambitions and innovative ideas. However, it takes time, effort, money, and even failures to turn those ideas into a physical business. With the help of VCs, these ideas can take flight and be potential. Being a part of the Vietnam start-up ecosystem, Viettonkin are proud to be the bridge for VCs and new innovative start-ups. Therefore, if you are looking for an investment in innovative business, we will assist you with the whole process. Contact us for more information!