Ho Chi Minh City's People's Committee has officially approved a project to establish a significant new venture capital fund. This initiative aims to invigorate the city's innovative startup ecosystem through a public-private partnership model. The fund is set to launch in 2026 with an initial charter capital of 500 billion VND to support technology enterprises.
A Strategic Public-Private Partnership
The fund will operate as a joint-stock company, blending public and private capital to maximize its impact and reach. The initial 500 billion VND will comprise 200 billion VND from the state budget and 300 billion VND from private investors. This "seed capital" mechanism is designed to attract two to three units of private investment for every unit of state capital.
Fostering Innovation with Controlled Risk
A key feature of this new fund is its "controlled risk acceptance" mechanism, a novel approach for state-backed initiatives in Vietnam. Investment performance will be assessed across the entire portfolio rather than on a project-by-project basis, allowing for higher-risk ventures. The total allowable loss is capped at 50% of the state's capital contribution, encouraging bold yet responsible investment decisions.
Ambitious Goals and Key Investment Sectors
The fund has set ambitious targets for the 2026–2035 period, aiming to invest in 50 to 150 innovative startups and science-technology enterprises. It also plans to support the commercialization of at least 50 new products and technologies while nurturing at least five large-scale tech firms. Priority sectors include digital technologies like AI and blockchain, semiconductors, biotechnology, and renewable energy.
Governance and Market-Driven Operations
To ensure efficiency and transparency, the fund will operate on market-based principles without administrative interference in investment decisions. Its joint-stock company structure clearly separates the ownership rights of the state and private investors from the management authority of professional investment experts. The fund will also have the ability to hire external fund management companies to oversee its activities.
Major Backers and Economic Impact
The initiative has already secured commitments from a consortium of prominent corporations and investment funds as founding shareholders. This group includes Vingroup, Sovico Group, VinaCapital, FPT Corporation, and Lotte Ventures Vietnam, among others. The fund is expected to significantly boost the innovation economy's contribution to the city's GRDP to 20–25% by 2030.
The establishment of the Ho Chi Minh City Venture Capital Fund marks a pivotal development in Vietnam's technology and innovation landscape. By bridging a critical funding gap with a market-driven, public-private model, the city is reinforcing its status as a leading regional innovation hub. This strategic initiative is poised to empower a new generation of startups and drive significant long-term economic growth.