Ho Chi Minh City to establish $19mn venture capital fund to boost innovation ecosystem

The fund will operate as a joint-stock company, according to the municipal Department of Science and Technology.

It is designed to ensure transparency and independence in investment decisions while avoiding administrative intervention.

The fund will not provide state guarantees for its investments.

Its governance structure will include a shareholders’ general meeting, a board of directors, a supervisory board, an executive management team, and an independent investment council.

It is allowed to hire professional investment management firms or advisory companies to oversee the fund’s investment operations, with the goal of maximizing efficiency and returns.

Between 2026 and 2035, the fund is expected to invest in between 50 and 150 innovative startups and high-technology enterprises.

It also aims to support the commercialization of at least 50 products or technologies and incubate a minimum of five large technology companies capable of pursuing IPOs or mergers and acquisitions.

The initiative is designed to leverage public capital to attract private investment.

For every unit of state funding, the city aims to draw in two to three units of private capital, with investment sourced from organizations, firms, and individuals expected to account for more than 60 percent of the fund’s total resources.

The fund will help increase the contribution of innovation and high-tech sectors to 20-25 percent of the city’s gross regional domestic product in 2030.

Although investment activities will primarily focus on projects located in Ho Chi Minh City, the fund may also invest in companies based in other provinces if they commit to technology transfer, establish research facilities, or develop production and business operations that benefit the city’s economic development and supply chains.

Eligible investment targets

The fund will benefit innovative startups, science and technology enterprises, high-tech manufacturing firms, and incubation projects that have prototypes or registered patents.

Priority sectors include strategic and emerging industries such as digital technology, including artificial intelligence, big data, and blockchain, semiconductor and microchip manufacturing, biotechnology and advanced medical technologies, new materials, renewable energy, automation, and robotics.

The fund will feature a ‘controlled risk acceptance’ mechanism, marking a departure from the traditional requirement of strict capital preservation for state-funded investment projects.

The program sets an overall risk threshold, stipulating that total investment losses cannot exceed 50 percent of the state capital portion during a single investment cycle.

Under the plan, fund managers and representatives overseeing state capital will be exempt from civil liability and administrative penalties for investment losses, provided those losses result from objective circumstances and the individuals involved have complied with established investment procedures, transparency requirements, and internal regulations.

Capital structure, expansion plans

Ho Chi Minh City Venture Capital Fund Joint Stock Company is expected to be officially established in 2026 with an initial charter capital of VND500 billion.

The state budget will contribute VND200 billion ($7.6 million), representing 40 percent of the fund, while private investors will provide VND300 billion ($11.4 million), accounting for the remaining 60 percent.

From 2027 to 2035, the fund plans to gradually raise additional capital each year.

By 2035, the total charter capital is expected to reach at least VND5 trillion ($190 million).

The city has already received commitments from several major corporations and investment firms to participate as founding shareholders.

They include Sovico, Vingroup, VinaCapital, Becamex IDC, VNG Corporation, CT Group, Hoa Sen Group, Lotte Ventures Vietnam, and FPT Corporation.