Vietnam rising star attracting investment in startup ecosystem

According to the Vietnam National Innovation Centre (NIC), Vietnamese startups raised a record $1.4 billion across 165 deals in 2021. This represented a 1.6-fold growth, up from $894 million and 126 deals in 2019, indicating that dealmaking in the market has regained momentum following a drop due to the pandemic. The momentum will continue into 2023 with anticipated GDP growth of 6.7 per cent in 2023.

“The growth we are seeing now in Vietnam comes from a strong foundation that has been years in the making. We are building for the long-term and poised not only for quick wins today, but sustainable growth,” said Vu Quoc Huy, general director of the NIC.

He added that a thriving startup ecosystem in Vietnam was an important pillar for driving the country’s wider innovation and digital transformation agenda - to continue to strengthen the economy and achieve long-term sustainable growth. The Vietnam Venture Summit is one of the cornerstones for bringing together the ecosystem players and the Vietnamese government to set the growth agenda for a sophisticated startup ecosystem, and learn lessons from the global community. This year’s summit is the largest yet and reflects the growing interest and partnership with the global investment community.

The Vietnam Venture Summit 2022 is hosted by Vietnam’s Ministry of Planning and Investment and co-organised by the NIC and Golden Gate Ventures, a venture capital fund in Southeast Asia (SEA) founded by Silicon Valley natives.

“In the first decade of SEA’s startup ecosystem, Singapore and Indonesia were the leading growth drivers, with Singapore bringing financial and human capital to the table, and Indonesia bringing a huge domestic market. Fast forward to 2022, Vietnam is the third pillar of this golden triangle, bringing a lethal combination of top tech talent, a Vietnamese culture of entrepreneurship and a fast-growing domestic market," said Vinnie Lauria, founding partner at Golden Gate Ventures. "When you put all these elements together, it’s not hard to see why more global investors are betting big on SEA. In fact, we’re seeing that the global economic environment is working in the region’s favour.”

He further noted that Vietnam is at a critical inflection point in its economic development. The global macroeconomic environment, Vietnam’s position in the region and the tailwinds of COVID-19 had created the optimal context for the country to finally capitalise on its top tech talent, highly educated population and openness to international trade. It is time for Vietnam to take its place in the spotlight.

Vietnam’s development mirrors China’s and Indonesia’s development years ago, with domestic consumption forecast to increase 20 per cent per year and rising digital demand post-pandemic with internet users accounting for nearly 70 per cent of Vietnam’s population in 2020.

Meanwhile, the government is making efforts to create a more favourable environment for venture investment and innovation. The country already started with preliminary steps to draft the Venture Investment Law and aim to have a more concrete regulation framework for the venture market in Vietnam. The initiatives aim to the support the venture capital and startup community not only in Vietnam but also across the region.

Die-hard entrepreneurs are re-inventing themselves to solve business problems and find their niches in Ho Chi Minh City.

The Vietnam Startup 4.0 Forum was held on October 19, bringing an opportunity to increase connectivity and cooperation in the future.

As an innovation and startup hub in the region, Singapore continues to attract and nurture startups from Southeast Asia, with many startups managing to scale successfully out of Singapore. Edwin Chow, Assistant CEO of Innovation and Enterprise at Enterprise Singapore, talked to VIR’s Minh Anh about the key factors to success for startups and how they can thrive in a global arena.