TECH STARTUPS IN VIETNAM

Tech Startups in Vietnam mô tả ngành công nghệ Việt Nam như một trung tâm khởi nghiệp sôi động. Nó chi tiết về các startup công nghệ thành công, tăng trưởng trong ecommerce và fintech, và sự quan tâm từ nhà đầu tư quốc tế. Đồng thời, nêu thách thức như thiếu hụt nhân tài và hạn chế về pháp lý. Điểm nhấn là sự tăng trưởng của người dùng internet và điện thoại thông minh, tạo cơ hội lớn cho ngành công nghệ Việt Nam trong năm 2024.

TECH STARTUPS IN VIETNAM A STATISTA DOSSIERPLUS ON TECH STARTUPS IN VIETNAM Table of contents 03 Tech unicorns leading the 01 Startup landscape domestic market ▪ Investment landscape ▪ Startups as market leaders ▪ Local-driven startup sectors ▪ Unicorns' profile ▪ Investor profile 04 Outlook: challenges and ambitions 02 Why Vietnam is Southeast Asia's next ▪ Challenges startup hotspot ▪ Outlook ▪ Government supports and legal framework ▪ Economy-driven factors ▪ Digital evolution in consumer landscape 2 Vietnam: Southeast Asia's next startup hotspot? Executive summary Within a few years, Vietnam has seen the emergence of over 3,800 ▪ The thriving digital domestic market, with over 70 percent of its startups and four tech unicorns that have attracted billions of U.S population being online dollars in funding, raising the question of whether the country could be the next startup hotspot in Southeast Asia Many of these startups have While Vietnam can be proud of the achievements of its startup sector, proven that they can not only provide internet users with their the country still has a long way to go and a lot to tackle in order to make demanded digital products and services but can also become market itself truly a startup nation: leaders in several categories One can no longer look at the Vietnamese internet landscape without the inclusion of the leading social messaging ▪ Vietnamese startups often face difficulty in attracting enough talent, app, online payment service, or online blockchain game, all made by finding angel investors, and managing their funding and growth due Vietnam’s most successful startups Made-by-startup applications have to the new, rather inexperienced ecosystem made significant impacts on the Vietnamese digital economy, especially in fintech, where financial services and technology are now much more ▪ Vietnam lacks up-to-date legal frameworks which are needed for the inclusive for the population development of tech products and startups, such as in the case of fintech and blockchain As a result, some of the most successful Thus, Vietnam has stood out in the last couple of years as the next startups in the country have recently moved their holdings to startup nation to watch due to the ongoing growth and potential of this Singapore, as the island nation provides access to more international sector This success can be attributed to recent economic investors, a well-established startup community, and clear-cut developments, such as: regulations for the tech industry ▪ Vietnam’s e-commerce market is set to grow threefold and become This report looks at how far Vietnam has come on its journey to the second largest e-commerce market in Southeast Asia by 2025 becoming Southeast Asia’s next startup hotspot, focusing on its startup landscape and the driving forces behind the growth of this sector ▪ The 1.4 billion U.S dollars of investment received by Vietnam’s tech Additionally, it identifies the challenges faced by Vietnamese ventures, startups in 2021, a large proportion of which came from venture as well as provides an outlook for the future of made-in-Vietnam capitalists from abroad startups 3 “ Without a clear legal framework, startups always live in fear while „ operating They have to be on the defensive thinking about how to comply with the law rather than spend that time on business and development - Nguyen Thanh Trung CEO of Sky Mavis 4 01 Startup landscape ▪ Investment landscape ▪ Local-driven startup sectors ▪ Investor profile Vietnam’s startup sector is expanding rapidly Figures show an increasing number of investments, deals, and deal values Growth of investments in tech startups in Vietnam based on value and number of deals from 2013 to 2021 Vietnamese startups received a record- breaking level of investment in 2021, Investment value Number of deals valued at 1.4 billion U.S dollars In the five-year period between 2016 and Investment in million 2,000 165 200 Number of deals 2021, the number of investment deals U.S dollars 1,500 rose more than fivefold, from 31 deals 1,000 59 126 105 150 in 2016 to a total of 165 deals in 2021 443 874 1,442 500 2018 2019 451 Additionally, bigger deals ranging from 0 2020 100 at least 10 million U.S dollars started to pick up in the last couple of years In 9 21 42 31 30 50 2021, almost one billion U.S dollars 20 46 45 105 48 were invested in deals valued at over 50 2015 0 million U.S dollars, totaling a gross 2013 2014 2016 2017 2021 value larger than the total of all small deals combined These larger deals Value of capital investments in tech startups in Vietnam from 2018 to 2021, by deal size were often made as later series funding for more mature startups that had 0.5m or smaller Over 0.5m to 3m Over 3m to 10m Over 10m to 50m Over 50m already achieved certain milestones, such as in the case of MoMo’s series E Investment in million 7 29 11 145 251 301 386 12 40 65 108 226 960 and Sky Mavis’s series B (see pages 28 U.S dollars 2018 13 62 112 2020 10 114 132 226 and 29) 2019 2021 (1) Note(s): Vietnam; 2015 to 2021 (2) Note(s): Vietnam; 2018 to 2021 Source(s): Cento Ventures; Do Ventures; Vietnam National Innovation Source(s): Cento Ventures; Do Ventures; Vietnam National Innovation Center; ID 1338611 6 Center; ID 1315060 Local-driven innovations: magnets for venture capital Online retail and digital payment categories are top receivers of venture capital Value of capital invested in tech startups Leading startups based on funding value The Vietnamese market of online in Vietnam in 2021, by segment (in million U.S dollars) in Vietnam in 2021 (in million U.S dollars) payment and online retail was, until recently, either in a blue ocean or a Investment value in million U.S dollars Investment value in million U.S dollars monopoly situation But with the online 300 payments market receiving 450 million Retail 469 MoMo U.S dollars of investment in 2021 Payment 450 258 alone, startups are playing a significant Entertainment/gaming 250 role in making e-commerce more Financial services 175 152 accessible and inclusive for Vietnam’s Education 100 digitally-savvy population Business automation 61 Multi-vertical In 2021, MoMo’s e-payment service, and Healthcare 55 Tiki Tiki, an e-commerce marketplace platform, bagged the biggest funding Others 55 deals within the startup sector Tech Real estate and infrastructure products in these categories are in high 42 demand, such as MoMo’s e-wallet, Entertainment/non-gaming which had 26 million downloads in H1 Logistics 37 VNLife 2021, making it the most popular app of its kind that year (see page 28) Communication and communities 33 Local services Employment 29 10 Sky Mavis 8 7 4 EQuest 4 (1) Note(s): Vietnam; 2021 (2) Note(s): Vietnam; 2021 Source(s): VnExpress; ID 1290438 Source(s): Cento Ventures; Do Ventures; Vietnam National Innovation Center; 7 ID 1246483 Yet much of the funding comes from non-Vietnamese investors Funds investing in tech startups Vietnam 2021, by origin 11 Over 170 funds were invested in tech Japan startups in 2021, of which around 16 percent were local investors The rest 13 34 came from markets with more Other: Southeast Asia Singapore experienced venture capitalists, including Singapore, the United 17 28 States, Korea, and Japan For these Korea Vietnam investors, Vietnam offers many greenfield opportunities thanks to the 173 28 domestic consumer pool, in contrast North America to the already well-developed markets Total in most of the countries 21 In the case of MoMo, for example, the Other: excluding Asia company operates purely in Vietnam, yet it has been financially backed by 21 well-known American private equity Other: Asia, firms such as Goldman Sachs and excluding Southeast Asia Warburg Pincus throughout its development 8 Note(s): Vietnam; 2021 Source(s): Crunchbase; Nikkei Asia; Reuters Source(s): Cento Ventures; Do Ventures; Vietnam National Innovation Center; ID 1304660 02 Why Vietnam is Southeast Asia’s next startup hotspot ▪ Government supports and legal framework ▪ Economy-driven factors ▪ Digital evolution in consumer landscape Vietnam aspires to be more startup-friendly Less time and fewer procedures are needed to start a business in Vietnam compared to many Asian countries Time required to start a business in the Asia- Number of startup procedures needed to Compared to Asia’s startup hubs, Vietnam still Pacific region in 2020, by country or region (in register a business in the Asia-Pacific region in has a lot to do to support entrepreneurs In 2020, it took a startup at least 16 days and days) 2019, by country or region eight procedures on average to legally start a business in the country, putting Vietnam in Time in days Number of startup procedures the middle range on the ease of starting a 13 new business in Asia However, the country Laos 173 Philippines has been making a lot of progress since then, Indonesia 11 from allowing 100 percent foreign ownership Cambodia 99 10 of enterprises to providing special tax India 9 treatments that exempt a significant share of Philippines 33 Laos 9 taxes for new businesses Bangladesh 9 Nepal 22.5 Cambodia 8 Embracing the goal of making the country a Mongolia 8 “startup nation,” Vietnamese policymakers Bangladesh 19.5 Bhutan 8 have been aiding the startup community with Vietnam 8 additional funding, establishing supporting India 17.47 Nepal 8 organizations such as the National Innovation Japan 8 Center, as well as building the tech startup Malaysia 17 Malaysia 7 incubator of Sai Gon Silicon City in recent Sri Lanka 6 years Pakistan 16.5 Timor-Leste 6 Myanmar Source(s): Vietcetera; Vietnam Investment Review; VnExpress Vietnam 16 Timor-Leste 13 Indonesia 12.64 Bhutan 12 Mongolia 12.00 Maldives 12 Japan 11.15 10 (1) Note(s): Asia, APAC; 2020 (2) Note(s): Asia, APAC; 2019 Source(s): World Bank; ID 1119061 Source(s): World Bank; ID 731104