41.000 enterprises temporarily ceased in Q1 2022, an increase of 44.6% compared to the same period last year. On average, 15.4 thousand enterprises withdraw from the market each month in the last quarter.
Rising interest rates, declining market liquidity, supply chain disruptions and economic recession are impacting the business in Vietnam. Companies are seeking to retain their businesses while startups stop cash-burning because they expected to see less investment coming this year.
Global venture funding for startups is set to fall by 19% in Q2 2022 from the previous quarter, according to CB Insights. Venture funding in the SEA declined to 36.3 billion USD in the first quarter, a 7 percent drop compared to the same period last year, and 31 percent dip compared to the last quarter of 2021, according to Crunchbase.
The foreign direct investment to Vietnam from the beginning of the year to 20th April 2022 including newly registered capital, adjust registered capital, and the total value of capital contribution and share purchases of foreign investors reached nearly 10.81 billion USD, decreased by 11.7% compared to the same period in 2021, according to GSO.
However, Vietnam’s economy expanded by 5.03 percent compared in Q1 2022 with the same period as last year which giving some hopes. Michael Ngo – Country Director of ELSA Vietnam said “Vietnam is in a great position to become not only a big regional player, but also to take its rightful place on the global stage. English proficiency will definitely play a key role in achieving this. ELSA is built for that mission.”
Language learning startup ELSA recently launched “Empower the Workforce of Tomorrow”, a 15-billion-VND program to assist enterprises in Vietnam upskilling their workforce to supporting businesses recovery after the pandemic and contribute to the economic development.
In addition, ELSA provides solutions for enterprises through tailored modules and lessons according to the needs and demands unique to the industry and its business units through over 200 topics, 5.000 lessons, and 26.000 exercises ranging from Business English to casual conversations.
In the launching of Empower the Workforce of Tomorrow, Michael Ngo shared 3 main factors behind ELSA’s fundraising success. Investment on the AI technology and bringing together community value at an affordable price strategies are on the list.
“Before you expect anyone to invest in your company, you have to invest in your own people first. I believe that our team plays an indispensable role in ELSA development and we always strive to create conditions for our staff to maximize their potential. It can be said that ELSA value is not an individual effort, but a collective effort of all the people accompanying us.”, Michael Ngo said.
Investors are much more cautious and skeptical of deals. They are looking at not only strong revenue growth but also protections built into deals. He added gone are the days of startups “growing at any cost” or burning money for growth without having a clear revenue model in mind. Companies need to have a monetization model in mind from the beginning. It will absolutely change many times along the way, but investors need to know that you are proactively planning for it and being nimble enough to adjust as needed.
He always come back to a quote from George Patton “A good plan, violently executed now, is better than a perfect plan next week”. As for him, companies are looking to raise funding must solve a big problem that is worth solving. This problem has to be able to reach beyond Vietnam, think regionally or even globally if possible. The bigger the problem solved, the larger the TAM (Total Addressable Market) and the bigger the potential of the business.