Innovation attracts large venture capital

Hanoi - This year will be pivotal for the next stage of development of innovative enterprises and Vietnam's digital economy to attract investment capital.

The Vietnam National Innovation Centre (NIC) and the venture capital firm Do Ventures Vietnam jointly released the Vietnam Innovation and Tech Investment Report on April 21.

This is the second year that the Vietnam Innovation and Technology Investment Report has been released.

Speaking at the ceremony, Deputy Minister of Planning and Investment (MPI) Tran Duy Dong said innovation was an inevitable trend not only in Vietnam but also around the world.

In recent years, Vietnam had made drastic changes in mechanisms and policies for innovation, which is reflected in the Global Innovation Ranking (GII), where the country moved from 52nd place out of 141 countries and economies in 2015 to 44 out of 132 last year, holding the number one position in the group of 29 countries with the same income level.

Last year the economy faced many difficulties because of the COVID-19 pandemic, but it was also a record year for venture investment in Vietnam with a total investment of 1.4 billion USD, an increase of 1.5 times compared to the previous record at 874 million USD in 2019, with the appearance of two new technology "unicorns" Momo and Sky Mavis.

NIC reported that the total number of investment funds participating in Vietnam increased by 60 per cent, evenly distributed among countries.

Among them, the country with the most active investors last year was Singapore, followed by Vietnam and the US.

Investment activities from Japan into Vietnam are also gradually becoming more active after two years of slowing down.

Total transactions of deals over 10 million USD exceeded 1 billion USD, up 255 percent over the previous year.

While the capital inflow into the seed round increased to a record high in both volume and value of the deal, the capital inflow into the rounds after series A has returned to pre-COVID-19 levels.

In particular, last year saw the appearance of five transactions worth over 100 million USD in the fields of payment, e-commerce and gaming.

With a large number of potential early-stage companies and a favourable business environment thanks to the close support of the Government, Vietnam's commercial ecosystem is ready to enter a more mature stage.

Le Hoang Uyen Vy, CEO of Do Ventures, said that the e-commerce and start-up ecosystem in Vietnam had made impressive recovery steps last year thanks to the persistence of businesses, as well as timely support from the Government.

“With the current momentum of development, I believe that Vietnamese founders will continue to achieve success and make Vietnam a remarkable technology hub in the region,” said Vy.

Deputy Minister Tran Duy Dong also affirmed that the domestic innovation and start-up ecosystem has recovered and reached a new height.

"This is good news and contributes to promote the growth of Vietnam's digital economy, a positive sign that we are on track to complete the target group of a digital economy that will contribute 30 percent of GDP by 2030,” said Dong.