VietNamNet Bridge – Most young information and communication technology (ICT) firms in Vietnam have to use their own capital or capital they borrow from friends and relatives to start their business. They have little help from venture funds.
After six years of working for a foreign invested firm that makes online and PC games in Vietnam, Le Giang Anh, a member of the 8X generation, or people born in 1980s, decided to leave the firm.
Anh and his three friends decided to set up a gaming firm, called JOY Entertainment, of which Anh is the managing director.
JOY Entertainment was established in 2012, but the four founding members could only start gathering their resources to develop their business in 2013. In the first period of operation, they focused on making offline games.
However, later, realizing that online games are favored, they began offering their products at the App store “market” and tried to learn more about gamers’ taste.
After one year of development, the firm of 30 workers successfully made a 3D online game. It sold the rights to exploit the games for commercial purposes to a domestic game distributor when it finished 30 percent of the work.
The game finally was put into testing in March 2014, while it was expected to make a debut in several days.
When asked about the start-up period, Giang Anh said JOY Entertainment’s products could not attract the attention of investment funds.
Anh thinks that investment funds do not have high confidence in Vietnamese ICT start-ups, especially the developers of games, a field which remains fledgling and risky.
However, game developers live with hope. A game development firm may incur losses for many consecutive years, but it will regain its money and make fat profits once its products are welcomed in the market.
Therefore, Giang Anh and his three partners still keep following their idea and mobilize capital from their parents and friends.
Only recently has the firm received a small financial support from a game distribution company in Vietnam.
Meanwhile, Anh still hopes he can seek financial investments from other sources as well.
According to Anh, no investment fund wants to help start-ups develop games. Most of the companies that receive support are the successful ones or those that have a reputation.
JOY Entertainment now needs a sum of VND250 million for monthly expenses, mostly to be spent on computers and workforce, to keep the business running.
Ngo Van Luyen, the founder and CEO of DivMob, also a game maker, said the initial capital for his business came from his own money and family members.
Luyen agreed with Anh that it is not easy to call for capital from investment funds. In order to catch the eyes of the investors, one needs to have a good business model which can promise high profits, or have very good business ideas.
Luyen said, though a lot of venture investment funds have been set up which announce they target ICT and technology projects, many business ideas still cannot be developed just because the owners have not received a “push”.
“It would be better if ICT start-ups could receive support from the State,” he said.