Fundraising is a challenge for most startups, especially climate technology startups. What are your thoughts on this?

Fundraising is crucial today and is a common challenge for all countries, especially developing countries like Vietnam, with a population of over 100 million. Finance is essential for implementing green transformation programs and adapting to climate change. According to international organizations, Vietnam needs about $20 billion annually to carry out these programs. In the energy sector alone, this figure exceeds $10 billion a year to fulfil the net-zero emissions strategy by 2050 and to meet the government’s phased targets.

However, needing capital doesn’t guarantee successful fundraising. To succeed, startups must understand what the capital market seeks. Investors are particularly focused on effectiveness, impact, and risk management. They fear that their capital may disappear without adding value, so they seek to optimize environmental, social, and economic impacts alongside return on investment (ROI). This ROI isn’t just about money; it also includes value for society, people, and the environment. For example, Clime Capital sets clear criteria: how much green electricity the project can add, how many kWh can be saved, how many tons of CO₂ emissions can be reduced, how many green jobs can be created, and the project’s contribution to emissions reductions and its impact on society, especially vulnerable groups.

If startups understand the capital market’s needs and can clearly present the problems they aim to resolve, the unique solutions they offer to meet customer needs and target markets, and their opportunity to dominate the market with an effective organizational structure, they will be able to persuade investors. Investors will then see that the project offers positive social impacts, ROI, and manageable risks, helping both sides find common ground.

However, the gap between the two sides remains significant. Despite needing capital, many startups do not fully understand the capital market’s demands and fail to meet criteria, which leads to delays in fundraising and missed opportunities for growth. The market has seen several failed investment deals, with disagreements in decision-making resulting in unwanted divestments.

Could you elaborate on the key gaps between startups and investment funds in the fundraising process?

The major gaps include a lack of key personnel in the new startup team, an incomplete and unprofessional fundraising dossier that makes it hard to convince investors from the first meeting, and unclear business models, market expansion strategies, and risk management. Investors, on the other hand, follow a detailed decision-making process and assess investment effectiveness carefully before committing capital. Therefore, startups must prepare a professional fundraising dossier, set up a clear data room, outline the opportunities and challenges, and effectively develop a risk-minimization strategy.

This approach not only brings financial benefits but also creates long-term value for the business and significant contributions to society and the environment. Thorough preparation and analysis are essential for startups to demonstrate their capabilities and commitment, helping convince investors to partner with them.

How can these gaps be narrowed?

I believe more support programs are needed for the startup ecosystem, such as training, strategic mentoring, small-scale trial opportunities, and regular networking with investors, customers, and supply chains. Programs like Helpdesk for capacity building, 1-on-1 coaching, and Technical Assistance Funds are essential, especially for emerging startups or those in the pre-seed or idea stages.

Government attention to the startup ecosystem will drive significant support, helping startups participate in pilot programs and contribute to local green transformation. By engaging, startups can build capacity, gain credibility, and contribute to the national green transformation roadmap. This also helps them scale up and potentially enter national unicorn incubators.

In my view, this is an effective way to overcome fundraising challenges, achieve short-term financial goals, support long-term sustainability, contribute to digital and green transformation, and become a new winner in the global order.

How do you see the opportunities and roles of climate tech startups in Vietnam’s digital and green transformation, especially with the goal for net-zero emissions by 2050?

Every challenge comes with an opportunity. For example, environmental pollution and poor air quality, especially in major cities like Hanoi, create urgent issues that need to be addressed. However, this also offers startups in the environmental sector a chance to showcase their ability to resolve these problems.

The Vietnamese Government is making significant efforts to achieve ambitious emissions reductions goals, offering roadmaps and policies to support businesses. International support and cooperation programs will also assist Vietnamese startups.

Vietnam’s renewable energy sector is like a “goldmine”, with much untapped potential. If startups seize this opportunity with government support, they can grow and contribute to the country’s sustainable development strategy, paving the way for new “unicorns” in renewable energy, agriculture, climate adaptation, and green transportation.

Climate technology has developed rapidly worldwide. Are Vietnamese startups falling behind in this market and facing disadvantages in fundraising?

In my personal view, we don’t necessarily need to create new machines or innovative technologies, as many developed countries already have effective solutions that are cost-efficient and well-suited to our needs. At Clime Capital, when choosing investments, we prioritize startups that can scale quickly, resolve emissions reduction challenges through digital transformation, attract green capital, and comply with both legal regulations and national goals in the short and long terms.

What’s important is that the business can demonstrate its superiority in terms of environmental impact, cost, and technology. It should also be able to transfer technology quickly, adapt innovatively to meet the specific challenges of Southeast Asia, and address the urgent emissions reduction needs of the region.

We need to use scalable technologies that are affordable for the majority, already proven, and supported by clear data. With these factors, Vietnamese startups will certainly have the opportunity to unlock green capital to drive transformation projects.

In today’s interconnected, open world, even developed countries with advanced technologies are eager to explore collaborative opportunities in Vietnam. They are ready to connect with Vietnamese businesses to resolve domestic issues, offering opportunities to prove that these initiatives have real impact, and, most importantly, deliver results.

How would you assess Vietnam’s climate startup ecosystem compared to global and Southeast Asian trends?

According to reports from several reputable international organizations and from discussions with international partners in the green finance sector at COP29, I am pleased to see that Vietnam is highly regarded for its emissions reduction efforts and climate change adaptation initiatives.

If we consider the world as a classroom, I believe Vietnam is one of the top students in Asia. We have quickly built and are progressively refining the legal framework to promote green transition, energy shift, and emission reductions, much earlier than many countries worldwide.

The international community also expects Vietnam’s startup ecosystem to grow stronger in the near future.

What changes do you anticipate in the investment preferences of funds in 2025? What advice would you give to startups, particularly in the climate technology space, during their fundraising journey?

In this regard, I can only share my personal perspective and cannot speak on behalf of other investors.

First, investments that drive sustainable development, climate adaptation, emissions reductions, and job creation in green sectors are paramount, especially for the Southeast Asia Clean Energy Facility (SEACEF).

Second, investors are always on the lookout for opportunities to invest in “innovators” - startups that bring creative approaches to resolving problems and addressing national and regional business challenges.

It’s only when we think outside the box and come up with new solutions, particularly to emerging issues, that we can achieve better outcomes.

I believe that Vietnam, with its advantage of over 100 million people, a strategic position in the region’s supply chains, and effective policies geared towards sustainable development, will offer significant advantages to startups. This is also an opportunity for investors to find more “deals” in this market.