Ho Chi Minh City launches public-private VC fund 'HCM VIF' -- VND 500 billion (approx. JPY 3 billion) fund led by VinaCapital to invest in AI, semiconductors, and biotech

On April 17, the Ho Chi Minh City People's Committee officially launched a public-private venture capital fund called the 'HCM Venture Innovation Fund (HCM VIF).' The initial total size is VND 500 billion (500 ty VND / approx. USD 19 million / approx. JPY 3 billion), structured as a public-private partnership (PPP) fund in which the Ho Chi Minh City government contributes 40% (VND 200 billion) and private investors contribute 60% (VND 300 billion). The fund will be managed under the leadership of VinaCapital, one of Vietnam's largest independent asset managers.

The fund plans to expand its assets under management to VND 5 trillion (approx. USD 200 million) by 2035, and initial investors include Vingroup, FPT Corporation, VNG Corporation, Sovico Group, Becamex IDC, CT Group, Hoa Sen Group, and Lotte Ventures Vietnam. This is the first time Ho Chi Minh City has institutionally had a 'public VC function,' playing a role equivalent to Singapore's EDBI or Indonesia's MDI.

HCM VIF's basic structure

Target sectors and investment targets

HCM VIF explicitly names nine 'future strategic industries' as priority investment areas, with weight placed on AI and semiconductors, in line with the Vietnamese government's 'Make in Vietnam' and national semiconductor strategy.

• Artificial intelligence (AI)
• Big data
• Blockchain
• Semiconductors
• Biotechnology
• New materials
• Renewable energy
• Automation
• Robotics

Over the ten years from 2026 to 2035, the fund has set targets of investing in 50 to 150 innovative startups and science-and-technology companies, achieving at least 50 commercializations of new products or technologies, and leading five or more companies to an exit through an IPO or M&A. The per-company investment amount is expected to range from seed to pre-Series A.

What it means for VinaCapital to lead management

VinaCapital is an independent asset manager founded in 1991 with about USD 4.6 billion in assets under management. Its VOF (Vietnam Opportunity Fund) is one of the largest Vietnam-focused funds listed on the London Stock Exchange (LSE). For startups, it runs 'VinaCapital Ventures,' and it will bring that operational know-how and screening framework to HCM VIF.

Although this is a government-led fund, placing a private-sector professional like VinaCapital in charge of management is designed to avoid the decision-making delays typical of government administration. Compared with Indonesia's MDI Ventures, a CVC originating from Telkom, HCM VIF is positioned as a hybrid model of 'government x independent asset manager x private LPs.'

Strategic intent of the 8 major LPs

Implications for Japanese investors and startups

HCM VIF does not exclude participation by foreign LPs. Japanese companies (CVCs and operating companies) that gain access through VinaCapital have room to negotiate co-investment and co-invest allocations. In particular, since VNG, Vingroup, and FPT are included as LPs, there is a good chance a deal pipeline will emerge in partnership with these three companies' CVCs (FPT Capital, Vingroup Innovation Foundation, and VNG Investment Holdings).

As a related development, Ho Chi Minh City has launched the Fintech Hub, and TikTok's establishment of three entities within VIFC, with a series of public-private startup and tech investment packages announced in April alone. The three-part set of VIFC, HCM VIF, and the Fintech Hub can be read as the core of Ho Chi Minh City's medium-term strategy to become 'Southeast Asia's third startup city.'

Comparison with competing cities

Looking only at the initial size, it is small compared with public VC funds in other countries in the region. However, it explicitly targets '10x growth by 2035,' and factoring in cumulative commitments and PPP-style leverage, its ultimate impact on the ecosystem is the kind that should be assessed over a ten-year horizon.

Points to watch going forward

• The sector of the first-year's first investment (whether AI, semiconductors, or biotech)
• The timing for opening foreign LP and co-invest allocations
• The carried interest distribution rules for VND-denominated and USD-denominated positions
• The connection to VIFC-HCMC's preferential tax regime (benefits based on portfolio companies' registered location)
• Vintage management to reach the 2035 target of VND 5 trillion

Sources

• VnExpress International: HCMC launches $19.7M venture fund to back startups
• VinaCapital: Asset Management & Private Equity in Vietnam