No more rice exports, and looking at VC money

Vietnam is shutting down, just like the rest of the world.

The big news is that Vietnam has stopped exporting rice. That’s not great for the rest of the world, since Vietnam is the 3rd largest exporter of rice in the world, with 6.58m tons Much of this goes to the Philippines (2.1m tons), with Ivory Coast, Malaysia and China also big markets. It looks like the Philippines will be hurt the most, although the country consumes about 12m tons annually, so it definitely gets rice from elsewhere (domestically and probably more imports).

Ho Chi Minh City is also shutting down, with all restaurants, bars, and any places related to entertainment and beauty. Lots of people are in quarantine - everyone coming in internationally is quarantined for 2 weeks.

In a break from COVID-19 news, there is a new report out on venture capital that had some interesting stats.

Source: NVCA

First, venture capital is just not that important in terms of overall investment flows. Specifically, total US venture capital assets under management (AUM) are just $444bn, which is a big amount, but not that big. It is not as big as the biggest US private equity firm, and two hedge funds are close in size. Apple has $100bn in cash right now, or almost a quarter of total VC AUM.

This represents US and Global VC deal flow. Source: NVCA

Second, US venture capital is still the biggest game in town, but its share is falling significantly. Back in 2004, total VC global deal flow was just $26bn, and the US made up 84% of that. Since then it has been on a decline to just 52% and less than 50% in some recent years.

We have seen a big rise in global VC firms, which is great. Even in the US, VC money is too concentrated - California makes up $257bn of the total VC AUM, or 58% of the total. Sure California is great, and the cluster of companies there makes for a very competitive market. But it can’t be the only place where ideas are hatched.

Source: Google Temasek & Bain

This brings me to Vietnam, which is actually doing alright. I have written up the Google Temasek Bain report on the SE Asian internet economy previously here. It is interesting to put it in comparison to the global figures. Looking at 2018 (which was a very good year) , there were 137 deals for a total of $350m in Vietnam. That represents a bit more than 0.1% of all deals. Ouch.

Total SE Asian funding was $14bn, or a bit less than 5% of the total global deal flow. Let’s say SE Asia represents a 8.4% of the world’s population, then it actually isn’t too bad. But most of the money goes to Singapore, and some of it is then used to invest in other SE Asian countries.

It will be interesting to see how these trends move over time. There is a real startup scene in Vietnam, but ultimately it is small because the Vietnamese economy is relatively small. As Vietnam grows, hopefully its startup scene will grow too.