Best strategy is generating highest income: IDG
Source: 25-JUL-2008 Intellasia | 23/Jul/2008 Thoi Bao Kinh Te Vietnam
Jul 25, 2008 - 7:00:00 AM The International Data Group (IDG) has announced its investment plan for US$500 million into Vietnam in the next three-years.During a recent working visit to Vietnam, IDG's chair Patrick J. McGovern shared this investment plan. Excerpts:

What are next investment plans of IDG in Vietnam?

IDG will start up the second venture capital fund with total capital of US$200 million in Vietnam within next six months. Targeted companies of the second fund will be the same as those of the first fund.

Some 40% of this fund's capital will be invested into internet-related companies such as e-commerce, online-auction web pages, online search tools and internet-based games. Twenty five percent of the fund's capital will be injected into mobile phone suppliers and 15% into software and information securities suppliers. The remaining capital will be invested into new material production and hi-tech sectors.

We are also building a US$300 million fund, or known as the Vietnam Growth Fund, which is scheduled to be kicked off from 2010. This fund will focus on development phases of companies. After studying development, experiment and introduction of new products, companies will need finance to expand production and markets. This fund will focus on providing such finance.

Why do you decide to continue investing into Vietnam?

So far, IDG has invested US$100 million into 39 companies in Vietnam. These companies have posted revenue growth of 25-35% a year and value increase of 35-40% a year. The Vinagame Co is a typical example. Vinagame increased its revenue from US$200,000 in the first year when we invested into it to US$42 million after three-years, reporting a growth of 200 times after three-years. This helps IDG Vietnam rank among 10 of the world's most successful venture capital funds.

Vietnam is one of the three fastest growing IT markets in the world. With the growth of 15-16% this year, especially 21% regarding the PC market, Vietnam follows China and India in terms of growth. We see that Vietnam's government continue promoting investment into education, further opening its door to foreign direct investment and encouraging development of the private sector.

Vietnamese people are very talent, keen on learning new technologies and hard-working. All these factors make Vietnam's IT market continue posting an annual growth rate of 15-20%. Vietnam will continue ranking among top three fastest growing markets in the world and within 15 next years, Vietnam may become the world's fastest growing market.

Do you have any advice on Vietnam's IT development strategy?

The best strategy is how to generate the highest income for the domestic IT sector. Vietnam should create its own IT products. When creating your own products, you will own the technology, brand and obtain the whole revenue from such products.

My advice is that Vietnam should continue focusing on investing into technology and education and encourage all people to participate into creative programmes in order to create products of Vietnam.

You have succeeded in almost all your investments. What do you advise young businesses?

I am very impressed at ambitions and enthusiasm of Vietnamese young businesses. They are very keen on building their companies to be strong companies. What they should do and what we can assess their success is their capacity of satisfying all demand of clients.