2023 Overview of Investing in Vietnamese Startups

Vietnam’s start-up ecosystem in 2023 presents a dynamic and rapidly evolving landscape, attracting significant interest from both domestic and international investors. Despite global economic challenges, the country’s focus on innovation, technology, and a robust investment landscape offer promising opportunities for venture capital.

Vietnam ranks 48th in the 2022 Global Innovation Index, reflecting its strong focus on digital transformation across sectors like education, healthcare, and finance. This digital push has spurred growth in areas such as cloud computing, AI, and big data analytics. The fintech sector, in particular, is booming, expected to reach $7.8 billion by 2025. E-commerce and logistics are other sectors showing substantial growth potential.

The Vietnamese government’s support for innovation and entrepreneurship, including initiatives like the National Technology Innovation Program and the National Start-up Support Centre, is a key driver of this growth. The country’s strategic location, large and young population, and low labour costs further enhance its appeal to investors.

Fintech remains a resilient sector amidst the changing climate, with significant investments accounting for 38% of the total capital. Retail, though experiencing a decrease, still holds strong as the second most active vertical. Other sectors like healthcare, education, and payments continue to attract investments.

With an estimated 3,472 start-ups, Vietnam’s start-up ecosystem is maturing, characterized by increasing venture capital investment and a growing number of successful startups. Support from institutions like the National Innovation Centre (NIC) and National Technology Innovation Fund (NATIF) bolsters this ecosystem. The country spends about one percent of its GDP on innovation, a significant investment given its status as an emerging market.

Despite these challenges, Vietnam’s start-up ecosystem is poised for continued growth. The government’s proactive approach, combined with a skilled young workforce and an increasing role of local venture capital firms, paints an optimistic future for tech investment in Vietnam. The rise in deals ranging from $10M to $50M signifies the progression of start-ups to higher growth stages.

In summary, Vietnam’s start-up landscape in 2023 is a mix of opportunity and challenge, with significant potential for investors willing to navigate its complexities. The combination of government support, a growing tech-savvy talent pool, and a maturing startup ecosystem makes Vietnam an attractive destination for tech investment.