The writing cited data from Vietnam’s National Innovation Centre (NIC) as showing that Vietnamese start-ups raised a record 1.4 billion USD across 165 deals last year, up from 894 million USD and 126 deals in 2019 – an indication that dealmaking in the market has regained momentum following a small COVID-19-induced dip in 2020.
Start-up founders across the region – not just from Vietnam – are eyeing the Southeast Asian nation as an ideal launchpad for their regional businesses, explained Ascend Vietnam Ventures (AVV) co-founder and managing partner Binh Tran.
Citing a 2016 government stated target of one million start-ups by 2020, he said Vietnam's tech ecosystem is relatively young, clocking in at six to seven years old, so venture capital opportunities are mostly seed based.
While the target may have been overambitious, it set out an intention to promote and support the nascent start-up ecosystem, and to create hype about the digital economy, he explained.
“The solutions coming out of Vietnam aren't going to just serve emerging Asia, some of these solutions are going to be globally leading companies that will beat Silicon Valley,” he told FinanceAsia.
Factors which make the country appealing to foreign investors include strong GDP growth – which was in the area of 7% per year for two decades prior to COVID-19 and is forecasted at 7.5% in 2022 – and its English-proficient and skilled youthful workforce.
Additionally, Tran highlighted the absence of large conglomerates acting as barriers to entry for new start-ups.
“97% of the enterprises in Vietnam are SMEs, and so you have this very accessible, equitable playing field,” he said.
Marina Tran-Vu, founder of Vietnam-based sustainable start-up brand, Equo, also noted the county’s young population, growing middle class, and investment into land and infrastructure.
In the context of global supply-chain woes exacerbated by pandemic restrictions and geopolitical trade tensions, Vietnam is drawing increased interest for its potential to develop further as an international trading and manufacturing hub. This has led many corporations to adopt a strategy for the diversification and management of global supply chains: turning to Southeast Asian markets.
Vinnie Lauria, managing partner of Golden Gate Ventures (GGV), referred to Vietnam as one of the vertices of the Southeast Asia “Start-up Golden Triangle,” the others being Singapore and Indonesia.
He cited “firms to watch” in Vietnam as including electric vehicle maker VinFast; gaming unicorn VNG; and e-wallet Momo.
Lauria held that listing on the local exchange is slowly becoming more appealing as an exit option and “we are likely to see dual listings for start-ups that have a broader regional footprint.”
The Vietnamese government has continued to update its strategy with the exchanges, which started in 2016 and this still continues to sharpen, he added.
