Vietnam among Southeast Asia's Startup Golden Triangle

On May 30, Golden Gate Ventures signed an agreement with the National Innovation Center (NIC) of the Ministry of Planning and Investment to strengthen long-term cooperation and develop the startup and innovation ecosystem in Vietnam.

With this agreement, Golden Gate Ventures will increase investment in the market, promote discussions, and develop new ideas to support Vietnamese startups.

Currently, Golden Gate Ventures has established representative offices in Singapore, Vietnam, and Indonesia, which are considered the Startup Golden Triangle of Southeast Asia.

Thanks to a decade of outstanding growth, the global investor community is paying more attention to Southeast Asia. In particular, Vietnam has become the new pearl of the region since rising to the top of the rankings – along with the leading countries in the region such as Singapore and Indonesia – with a record high investment capital of $1.4 billion last year – 1.6 times higher than the previous record of just over $870 million in 2019.

In the first four months of this year, the number of newly-established businesses increased by 12.3 per cent on-year and almost 32 per cent compared to the previous two years.

Director of NIC Vu Quoc Huy feels that, along with the positive growth momentum of foreign investment, this outcome is a clear recognition of Vietnam's potential in the startup ecosystem.

“We expect the investments into innovation and startups to double in the next three years,” stated Huy.

Vinnie Lauria, founder of Golden Gate Ventures added, “Southeast Asia has always been a region with great potential, but expanding the business model is a big challenge because of the uniqueness of each market. Our research on the region's largest unicorns confirms that the combination of the unique strengths of Singapore, Indonesia, and Vietnam could accelerate growth and boost innovation."

Vietnam is projected to become an important driver of Asia's consumer market over the next decade as an additional 36 million people join the consumer class. The annual growth rate of domestic consumption could reach as high as 20 per cent.

In addition, Vietnam has the largest middle-class population in Southeast Asia – accounting for about 40 per cent of the total population today and four times higher than in 2000. By 2030, this number is expected to hit 75 per cent.

A young and highly educated workforce is also attractive in the Vietnamese market. Currently, 70 per cent of its 98 million people are under the age of 35 and the literacy rate accounts for over 95 per cent of the total population, which is high in Asia.

The third factor contributing to Vietnam's potential is the strong increase in digital demand after the pandemic. Up to the first half of 2021, the market added 8 million new digital users, 55 per cent of which were from non-metropolitan areas.

A report by Google, Temasek, and Bain&Company found that by 2025, the digital economy in Vietnam could reach $57 billion, a compound annual growth rate of 29 per cent.

Based on these factors, Kim Ngoc Thanh Nga, head of Ecosystem Development at NIC, said that Vietnam is in the perfect position of having extremely high internet penetration, a very large domestic market, many founders with innovative ideas, and partners who are settling in the country to support the development of the local startup ecosystem.