Raising Capital in Challenging Times: Unique Tricks to Secure Venture Capital Funding

The unique strategies of many startups help them not only stand firm in a volatile market period, but also continue to attract huge amounts of venture capital investment over the past year.

Raising Capital in Challenging Times: Unique Tricks to Secure Venture Capital Funding

A startup in Southeast Asia. Photo: Nikkei Asia

In 2022, the startup landscape faced formidable challenges with a sudden decline in venture capital, dropping from its record-high in 2021. Globally, capital flows plummeted from 620 billion USD to 366 billion USD, and within Vietnam, there was an 18% decrease in venture capital within the initial 9 months of the year.

The abrupt reduction in venture capital has led to the unfortunate downfall of many technology startups, compelling them to make critical cuts, particularly in human resources. On the flip side, some startups have managed to weather this storm through innovative business strategies.

A standout example is EQUO, a startup specializing in sustainable products to replace single-use plastics, which successfully raised 1.3 million USD in mid-2022. Despite the challenging environment, EQUO achieved an impressive revenue of 1 million USD, a noteworthy feat in the highly competitive "green" products sector.

Marina Tran-Vu, Founder & CEO of EQUO, shared insights into their approach. Rather than focusing on changing consumer behavior, EQUO aims to inspire change by offering the simplest and most accessible sustainable solutions. Marina emphasized,

"We don't educate people about sustainability and ask them to change. We give them the easiest solution possible without having to think or change behavior or lifestyle."

To actively engage users, the EQUO team consistently produces high-quality videos shared across various social networks, including Instagram, TikTok, Facebook, and LinkedIn. These videos encompass diverse content, such as visits to sustainable cafes, and collaborations with vloggers, photographers, cafe owners, and TikTok influencers. This continuous creation of content related to sustainability serves as a strategic means to "insert" messages about EQUO's sustainable products into the minds of customers.

This approach proves to be highly effective in enhancing brand awareness, increasing online traffic, and converting viewers into sales. Recognizing the importance of this visual medium, Marina Tran-Vu, CEO of EQUO, acknowledges the initial challenges faced by the team in adapting to the video production process. With a limited number of personnel, they initially enlisted freelance cameramen and editors to facilitate the learning process. Over time, the team successfully took over the entire production process, showcasing their dedication to mastering every aspect of delivering compelling and informative content.

EQUO's commitment to leveraging video content as a powerful tool not only highlights their adaptability but also underscores the significance of multimedia strategies in today's competitive market. The success of this approach further solidifies EQUO's position as an innovative and forward-thinking player in the sustainable products sector.

EQUO creates sustainable products, making it easy for customers to use without having to change their living habits. Photo: T.L.

Thriving amidst fundraising challenges in 2022, Rootopia, a Vietnamese fintech startup, secured 1 million USD in a pre-seed round after just one year of operation. Addressing the financial strain on families allocating up to 47% of their income to education, Rootopia offers moderate installment financing, making education more accessible. Mr. Ngo The Vinh, Project Leader, emphasized increased education demand amid rising tuition fees. Despite challenges, Rootopia's innovative credit score evaluation method and adaptability to cashless payments position it strategically.

Similarly, Fundiin, a BNPL pioneer in Vietnam, stands out with recent success in a series A capital round, raising $5 million in mid-2022. Not only focused on product development, Fundiin plans rapid expansion, recruiting talented personnel. With over 300 partners and 4,000 establishments, Fundiin's remarkable growth includes a user base five times higher and a total transaction GMV seven times higher than the previous year.

Fundiin's success is attributed to advanced technologies such as AI and machine learning, ensuring a low bad debt ratio and a positive Net Transaction Margin. Despite the fundraising landscape's challenges, startups like Fundiin showcase resilience, convincing investors of their potential through innovative business models, proving that with ability, belief, and perseverance, startups can overcome obstacles and secure necessary investments for long-term success.

Source: Doanhnhantrvietnam.vn