Why venture investors eye Vietnam as the destination for their capital?
thamnguyen99 14-09-2022, 12:15

Vietnam’s start-up ecosystem often draws comparison with that of Indonesia and China some years back, but investors in the market face different opportunities and exit options, say VC experts.

Venture investors are eyeing Vietnam as the latest destination for their capital. Vietnamese start-ups raised a record $1.4 billion across 165 deals last year, according to Vietnam’s National Innovation Centre NIC. The year finished up from $894 million and 126 deals in 2019 an indication that dealmaking in the market has regained momentum following a small Covid-19-induced dip in 2020.

Vietnam is home to 3,800 startups, along with 200 venture capital and 100 startup incubators. The four unicorns in Vietnam are VNG, VNLife (VNPay), M_Service (Momo), and Sky Mavis. Out of the total investment value of US$1.35 billion in 2021, many deals are worth millions. Some notable investments include the US$250 million investment into VNLife (Series B), US$258 million in Tiki (Series E), US$200 million in Momo (Series E), and US$45 million in KiotViet (Series B).

Start-up founders across the region not just from Vietnam are eyeing the Southeast Asian nation as an ideal launchpad for their regional businesses, Ascend Vietnam Ventures AVV co-founder and managing partner, Binh Tran told the Finance Asia.

The large investments into these start-ups highlight how the capital market is focused on tech businesses. Hanoi and Ho Chi Minh City have developed a robust ecosystem for tech startups, with dominating sectors including artificial intelligence (AI), e-commerce, fin-tech, and enterprise solutions, according to Sophie Dao, Partner of Global Business Services LLC, one of the top investment consulting companies in Vietnam.

“With a large workforce, lower labour costs and sizeable market, Vietnam is one of the popular destinations for Singapore’s start-ups” Sophie added.

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