HUST to launch $2mln fund to invest in early-stage startups

The Hanoi-based research university, also known as HUST, has unveiled plans to set up a venture capital fund, the first of its kind by a Vietnamese university, to invest in idea-stage startups initiated mainly by its graduates and students.

The BK Fund, managed by the university’s business arm BK-Holdings, will give each early-stage startup a chance to access $43,000 in seed capital to grow their business. The accelerator is not allowed to receive funding from the university, but from 30 investors who should include previous undergraduate or graduate students at the school.

The university will hold a 15-percent brand equity which is not subject to any change in the size of the Fund. The venture capital fund’s 5-member management board is expected to have at least two agents affiliated with the university.

Nguyen Quan, Former Minister of Science and Technology and president of HUST Alumni Association

“This is the first venture capital fund officially launched by a Vietnamese university,” said former minister of science and technology Nguyen Quan who is also the president of HUST Alumni Association. “If the plan works out as they are endeavoring to do it, in the long run, it will be simple for the BK Fund to raise more funds from investors”. Speaking highly of the role of the university in helping researchers bring their technologies to market, the former minister believed the BK Fund’s affiliation with the university will help it benefit from investing in potential opportunities that others might not spot yet. HUST has been ranked in the top 300 Asian universities by Times Higher Education 2020.

In addition to investing money in early-stage startups, the BK Fund will offer entrepreneurs the use of resources of the university, including the scientific knowledge and the university’s network of contacts, said Pham Tuan Hiep, manager in charge of seed funding at BK-Holdings, affirming the importance of a having a mentor when starting up a business.

Many of 200,000 HUST alumni are currently chief executives at international corporations and successful private business owners. Nguyen Doan Thang, chairman of Rang Dong Light Bulb, said the company is committed to pumping most of its venture capital funds into the BK Fund. The Hanoi-based company annually saves between 5% and 7% of its net profit to invest in early-stage startups in an attempt to explore the new technologies which can help it successfully transform into a digitized manufacturer.

Thach Le Anh, founder of leading accelerator Vietnam Silicon Valley

The new fund will be a welcome player in the country’s startup scene, said Thach Le Anh, co-founder of leading accelerator Vietnam Silicon Valley, adding that the university has all the capacities to launch a venture capital fund which is modeled after ones at top U.S. universities namely Harvard and Stanford. The Vietnam Silicon Valley founder said the seed capital offered by venture capital funds like the BK Fund will support technology start-ups from the very start and help them roll out their ideas as quickly as possible. 

Vietnam has planned to transform the country from an offshore manufacturing hub for foreign companies into a major player in the global digital economy. In doing so, the government has encouraged a start-up boom, according to the deputy minister of science of technology Tran Van Tung. Hence the establishment of venture capital funds is aligned with the government's vision of business policies. 

Assoc. Prof Hoang Minh Son, President of the Hanoi University of Science and Technology (middle) and Deputy Minister of Science of Technology Tran Van Tung (right) at the press conference to introduce the BK Fund on June 11

Assoc.Prof Hoang Minh Son, President of the university, said a university, in addition to the responsibility of developing knowledge through education and research, has the mission to transfer its academic expertise into private businesses which in turn apply such knowledge to make products and provide services to meet the market demands. And the BK Fund was born to accomplish that mission, solving one of the challenges facing start-ups to find the capital they need to get their ideas off the ground.

Hanh Pham