Ascend Vietnam Ventures (AVV) Plans to Raise New Fund to Fuel Vietnam’s Growing Tech Ecosystem

Ascend Vietnam Ventures (AVV), one of Vietnam’s leading venture capital firms, is preparing to raise its third fund as it looks to fuel the country’s growing tech ecosystem, which is increasingly capturing international attention. In a strategic move aimed at seizing the opportunity presented by Vietnam’s rapidly expanding startup landscape, AVV Co-Founder and General Partner, Binh Tran, revealed that the firm is planning to close and deploy its third fund by the second half of 2025.

With Vietnam's tech ecosystem maturing at an accelerated pace, AVV's new fund is expected to support a new wave of startups that are focused not only on domestic growth but on regional and global expansion. "We’re currently deploying capital from our second fund and expect to complete the portfolio of around 30 companies next year. Once that’s done, we’ll aim to close and start deploying from a third fund," Tran explained in a recent interview.

Positioning Vietnam for Global Leadership

Tran noted that while Vietnam's tech ecosystem was once perceived as closed, focused primarily on the domestic market, that perception is rapidly changing. "We’re increasingly seeing founders who think bigger, build for the world, and expand beyond Vietnam’s borders," he said. AVV has already invested in several companies that exemplify this shift. For instance, ELSA, a Vietnamese-founded speech recognition company, now operates in over 70 countries, while Trusting Social provides credit scoring solutions to more than one billion people across multiple markets, including Vietnam, Indonesia, India, and the Philippines.

This growing global ambition among Vietnamese startups is not limited to a few sectors. From fintech to enterprise software, Vietnam’s tech firms are increasingly building with a global mindset from day one. "It’s just the beginning," Tran emphasized. "We expect this trend to continue as more capital and talent pour into the ecosystem."

The Success of AVV's Early Funds and Strategic Focus Areas

AVV’s strategy has proven successful with the firm’s first two funds, which focused on sectors where Vietnam's unique strengths could drive both local and global growth. The firm’s first fund, fully deployed before the second fund closed in 2021, saw early investments in several successful startups, including three unicorns. Tran expressed confidence that these early investments will continue to generate strong returns. "We’ve already seen increasing distributions from Fund 1 as we exit our positions in some companies, while we plan to hold onto others for a few more years," he said.

The second fund, which is still in the process of being deployed, has been directed at a wide range of sectors, from fintech to Web3. One standout example is MFast, an agent-based banking platform that started in Vietnam and has since expanded to the Philippines. AVV’s portfolio also includes companies like Sky Mavis, PowerTrade, and Superfine, whose go-to-market strategies are global from the outset.

Tran highlighted AVV’s focus on sectors where Vietnam’s talent pool and cost advantages can offer a competitive edge on the world stage. “Fintech and edtech are booming in Vietnam,” he said. “We’ve invested in TechCoop, a fintech startup that provides financing for farmers, a sector that is so large in Vietnam that TechCoop is experiencing rapid growth without needing to expand internationally.”

Capitalizing on Vietnam's Unique Strengths

One of Vietnam's most significant advantages is its growing pool of young, highly skilled engineers and entrepreneurs who are eager to innovate. Vietnam also offers a low-cost base for startups, allowing them to build and scale without burning through capital too quickly. Tran noted that the country ranks fourth globally for mobile app development, with companies like Amanotes, a mobile gaming company, achieving over 4 billion downloads.

In addition to mobile gaming, Web3 and blockchain are also generating significant global interest. AVV has backed Sky Mavis, the company behind Axie Infinity, a pioneering blockchain game, and PowerTrade, a platform for decentralized finance (DeFi) products. “These sectors are attracting founders who are building globally scalable products from the very beginning,” Tran said.

At the same time, AVV is looking at other high-potential areas like enterprise software and artificial intelligence (AI). “Vietnam’s talent pool allows startups to build solutions that can compete globally in these sectors,” Tran added, emphasizing that while Vietnam’s technology adoption is still in the early stages, it’s inevitable that the country will continue to grow in prominence across multiple tech verticals.

Challenges and the Need for Later-Stage Capital

Despite the promising growth, Tran acknowledged that Vietnam’s tech ecosystem faces several challenges, especially when it comes to scaling startups beyond the seed stage. "While early-stage capital is increasingly available, there’s still a gap when it comes to later-stage funding, particularly for Series B and beyond," Tran pointed out. This gap in growth capital has made it more difficult for some startups to scale quickly, but AVV is working to bridge that divide by connecting Vietnamese founders with international investors who can provide the necessary capital.

Another challenge lies in the scaling expertise among local founders. Many Vietnamese entrepreneurs excel at building innovative solutions for local markets but often require guidance on structuring their operations for regional or global growth. To address this, AVV takes a hands-on approach, offering targeted mentorship and direct support to help founders build the skills they need to lead larger teams, navigate new markets, and implement best practices for scaling.

Additionally, regulatory hurdles can pose a challenge, particularly for startups looking to expand beyond Vietnam. AVV works closely with its portfolio companies to help them understand and navigate these challenges, drawing on both local expertise and international experience.

Opportunities in Fintech and Edtech

Among the sectors AVV focuses on, fintech stands out as a key area of interest. Vietnam’s large population and increasing mobile penetration have created fertile ground for digital financial services. Fintech startups, like TechCoop, are addressing the unmet demand for borrowing, particularly in the agricultural sector, which remains a significant part of the country’s economy.

In the edtech space, Tran highlighted Vietnam's cultural emphasis on education as a driving force for innovation. "Families here prioritize education and spend a significant portion of household income on it," he said. This cultural focus has created strong demand for edtech solutions that provide better, more accessible learning experiences. As a result, AVV is backing startups that leverage technology to transform education in Vietnam and potentially expand their solutions across the region.

Looking Ahead: AVV's Vision for the Future

As Vietnam’s tech ecosystem continues to evolve, Tran is optimistic about the future. He believes the country is poised to become one of Southeast Asia’s leading tech hubs, fueled by its vibrant talent, cost advantages, and increasingly global ambitions. "We’re excited to back startups that are positioned to capitalize on Vietnam’s growing digital transformation," Tran said.

Looking forward, AVV is committed to playing a pivotal role in this transformation. With plans to raise its third fund by 2025, the firm aims to continue supporting startups that are building the next generation of globally competitive companies. As more capital and talent flow into the ecosystem, Tran sees a bright future for Vietnam's tech industry, one where founders are no longer content with just local success but are aiming to make an impact on the global stage.

"We believe raising a third fund is a smart decision to capture value for our investors while driving the next wave of innovation in Vietnam," Tran concluded. With its track record of successful investments and deep understanding of the local market, AVV is well-positioned to help Vietnam's startups grow and thrive in the years to come.