Ho Chi Minh City (AFP)

A young, very connected population, a pool of cheap programmers and a promising sector in a country particularly vulnerable to climate change: green start-ups are on the rise in Ho Chi Minh City, Silicon Valley of Asia South East.

Le Thanh has an idea: make shoes from coffee grounds and sell them online.

He launched ShoeX in 2017 and made his mark in the Vietnamese edition of the famous reality show "Shark Tank", where businessmen invest in the promising projects of new entrepreneurs. He obtains an envelope of 200,000 dollars (180,000 euros).

Riding on the coronavirus pandemic, the very flexible company no longer produces sneakers and has been converting since April into the production, still based on coffee, of reusable protective masks, with biodegradable filter.

"We have been ordered 500,000 by the end of 2020 and we hope to multiply our production by four or five", enthuses Le Thanh whose small company already sells part of its production in the United States, Europe and Japan .

Before launching, the young man of 35 made his ranges in two multinationals in Canada, attracted by the higher salary than in local companies.

But he preferred to return to his country and set up his own company, because the market in Vietnam is "a little murky", less regulated than elsewhere and there are therefore "more opportunities to seize", according to him.

- Investment boom -

Investment in Vietnamese start-ups is booming: it jumped to 741 million dollars in 2019 against 284 million the previous year (+ 160%), according to data from the Singaporean company Cento Ventures, specializing in digital markets.

The money comes from local investors, but also from Japan, Singapore, South Korea ...

The communist country is now number two in Southeast Asia, behind Indonesia, but ahead of Singapore, in terms of funds injected into its start-ups.

And Ho Chi Minh City, the economic capital, is fast becoming a regional Sillicon Valley.

Companies that engage in "green tech" are particularly appreciated, Vietnam being in the top 10 of the countries most affected by climate change, according to the World Climate Risk Index.

Bamboo straws, sanitary napkins made of organic fabric, eco-friendly clothing and packaging, these small businesses are proliferating on the web.

Investments have been halted in recent months, as the pandemic has crippled the global economy.

But the country is well placed to rebound, underlines Eddie Thai, of the specialized investment fund 500 Startups.

GDP is expected to experience positive growth in 2020 of + 2.7%, according to forecasts from the International Monetary Fund, to make many economies in the world, which have entered recession, turn green with envy.

The very young population - 70% of the 97 million inhabitants is under 35 years old - addicted to smartphones and very connected (55 million Internet users) is another asset for these companies.

They also have very well-trained programmers who have studied in the United States or Europe, but also in Vietnamese universities which offer more and more courses.

And this labor at an attractive cost even compared to China or India.

But there are still brakes in the authoritarian country with the single party where the administrative heaviness is still required.

"Regulations have improved considerably since the 1980s, but there is still a lot to do," said Eddie Thai.

Investing for a foreigner is always a long and complicated process. Repatriating capital also requires a lot of time and administrative procedures.

The Thanh is not discouraged: it will seek new partners in Vietnam and abroad to try to obtain funds and benefit from their network.

In Vietnam, he explains, "the chances of success are greater than elsewhere, but it is also easier to fail. I like this risk taking".

© 2020 AFP