Startup models introduced at the Vietnam Startup Day 2018 (Photo: voh.com.vn) Hanoi (VNS/VNA) - Vietnam jumped from fifth to third in the list ofmost active start-up ecosystems in the six largest ASEAN economies in only twoyears.
The change was from the first half of 2017 to the corresponding period of 2019,with the country trailing only Indonesia and Singapore.
According to the Vietnam Tech Investment Report released recently bySingapore-based venture capital firm Cento Ventures and Vietnam’s early stageventure fund ESP Capital, the amount of invested capital and the number oftechnology deals done in the country have grown six-fold in the period.
The report showed local start-ups raised a total of 246 million USD during thefirst half of 2019. Of which, the three largest investments, including Tiki,VNPay, and VNG, captured 63 percent of the funding. In terms of sectors, keyblocks of the digital economy such as retail and payment accounted for almost60 percent of investment.
Multi-vertical companies are growing well and have captured a 12 percent shareof capital, while emerging sectors such as fintech, real estate and logisticsare only just beginning to pick up in Vietnam, collectively taking a 10 percentshare of total capital.
According to the report, 2018 and 2019 have seen a new wave of Vietnamesestart-ups that raised 50 million USD to 100 million USD rounds for the firsttime. If this trend progresses, more Vietnamese companies could approach the 500million USD and eventually 1 billion USD valuation mark in the years to come.
Between 2017 and 2018, most deals came from Singapore and Japan-basedinvestors. This year, Korean venture capital firms led as one of the mostactive investors during the year’s first half, having participated in almost 30percent of deals. Notably, many of the Korean financiers invested in Vietnamesestart-ups for the first time. Local investors were also active, withparticipation in some 36 percent of deals. The number of deals grew from 13during the first half of 2018 to 21 deals in the same period of 2019.
Enterprises also play an active role in Vietnam’s start-up ecosystem. Forexample, FPT has long provided investment support to local start-ups. Last yearsaw Vingroup set up its corporate ventures capital (CVC), while other prominentcorporations such as Masan and VietjetAir are considering similar initiatives,the report noted.
Banks like VPBank and TPBank provide preferential lending programmes forstart-ups, while VPBank and UP Coworking offer free facilities for qualifiedcompanies. Viettel, the largest Vietnamese State-owned corporation, has run andsponsored numerous start-up events such as Viet Challenge, IOT Hackathon, andViettel Advanced Solution Track.
Vietnam has experienced a surge in both the amount of capital invested and thenumber of deals done since the beginning of 2018, with the 2018 fiscal yeartotalling 444 million USD, whilst the 2019 fiscal year is expected to reach 800million USD.
Cento Ventures believes the amount raised during the second half of the yearwill be significantly higher than that of the first as several later stagecompanies that raised funds in 2018 and early 2019 are in the process ofclosing another sizable investment round or expanding their current round.
The country shares similar trends with other Southeast Asian markets. Onlineretail attracts a large portion of funding, while sectors such as financialservices, real estate, and logistics are also gradually growing. Multi-verticalcompanies are being formed as mature digital companies seek to expand outsidetheir core business and are likely to attract an increasing share of funding inthe coming years.
Simultaneously, differences exist. Education is among the country’sbetter-funded sectors. Payment firms continue to attract the majority offintech investment as Vietnam continues to develop the necessary digitalpayment infrastructure. – VNS/VNA
VNA
