In the first quarter of 2022, 41,000 companies closed temporarily, an increase of 44.6% compared to the same period last year. In the last quarter, an average of 15.4 thousand companies withdrew from the market.
Michael Ngo – Country Director of ELSA Vietnam
Rising interest rates, declining market liquidity, supply chain disruptions and economic recession are impacting operations in Vietnam. Companies are trying to keep their business while startups stop burning money because they expected less investment this year.
According to CB Insights, global venture capital funding for startups will fall 19% in the second quarter of 2022 from the previous quarter. According to Crunchbase, venture capital funding in the SEA fell to USD 36.3 billion in the first quarter, down 7 percent from the same period last year and 31 percent from the last quarter of 2021.
Vietnam’s foreign direct investment from the beginning of the year to April 20, 2022, including new registered capital, adjusted registered capital, and the total value of capital contributions and share purchases of foreign investors reached nearly USD 10.81 billion, decreased by 11.7 % compared to the same period in 2021, according to GSO.
However, the Vietnamese economy grew by 5.03 percent compared to the first quarter of 2022 with the same period as last year, giving some hope. Michael Ngo – Country Director of ELSA Vietnam said: “Vietnam is in an excellent position to not only become a major regional player, but also to take its rightful place on the global stage. English proficiency will certainly play a key role in achieving this. ELSA was built for that mission.”
Language learning startup ELSA recently launched “Empower the Workforce of Tomorrow”, a VND 15 billion program to help enterprises in Vietnam up-skill their workforce to support and contribute to business recovery after the pandemic to economic development.
In addition, ELSA provides solutions for enterprises through tailor-made modules and lessons according to the needs and requirements unique to the industry and its business units through more than 200 topics, 5,000 lessons and 26,000 exercises ranging from business English to informal conversations.
At the launch of Empower the Workforce of Tomorrow, Michael Ngo shared 3 key factors behind the success of ELSA’s fundraising. Investments in AI technology and bringing community value together at an affordable price are on the list.
“Before you expect someone to invest in your company, you must first invest in your own people. I believe that our team plays an indispensable role in the development of ELSA and we always strive to create the conditions for our employees to maximize their potential. It can be said that the ELSA value is not an individual effort, but a collective effort of all the people who accompany us,” said Michael Ngo.
Investors are much more cautious and skeptical about deals. Not only are they looking at strong revenue growth, but also protections built into deals. He added that the days of startups that “grow at all costs” or burn money for growth are over without having a clear revenue model in mind. Businesses should have a monetization model in mind from the start. It will definitely change many times along the way, but investors should know that you plan for it proactively and are agile enough to adapt if you need to.
He always comes back to a quote from George Patton: “A good plan, now by force, is better than a perfect plan next week”. As far as he’s concerned, companies seeking financing need to solve a major problem worth solving. This problem must be able to extend beyond Vietnam, regional or, if possible, even global thinking. The greater the problem solved, the greater the TAM (Total Addressable Market) and the greater the company’s potential.
