A look at Vietnam’s pho-bulous startup scene

Growing up, I wasn’t very aware of Vietnam. I never saw tourism ads for the country, at least not in the same way I did for places like Malaysia and India (Malaysia Truly Asia and Incredible India, anyone?). Vietnamese food also wasn’t as popular or easy to find in the malls I frequented.

Now, that’s all changed. Vietnam’s come up on the global stage on all fronts, and its startup scene in particular is in the limelight. Some investors are seeing it as the third major startup market in Southeast Asia, after Singapore and Indonesia.

Here at Tech in Asia, we’re keen on Vietnam and the opportunities it holds. That’s why the country is on our list of destinations for our monthly Founders Meetup.

Let’s take a closer look at what’s going on with Vietnam.

Where we’re at

According to Startup Bink, Vietnam ranks fifth among Southeast Asian startup markets in 2023. Additionally, Ho Chi Minh City is on Startup Genome’s list of 100 emerging ecosystems.

Looking at funding data, the country has seen startup investments rise consistently since 2018, peaking at US$1.9 billion in 2021.

Funding into Vietnamese startups took a hit in 2022, in line with the larger funding winter. However, in the second half of the year, despite the overall drop in funding amount, there was an uptick in deal count compared to H1 2022, which indicates that investment activity is still healthy.

Vietnam was also still one of the most funded startup ecosystems in Southeast Asia last year, coming in third after Singapore and Indonesia, according to Tech in Asia data. This is a reflection of where investor interest lies and of the opportunities that they see in the market.

As of October 2023, Vietnam is home to four unicorns: VNG, which operates messaging app Zalo and e-wallet ZaloPay, payments platform MoMo, VNLife, which is the owner of payment firm VNPay, and blockchain gaming startup Sky Mavis.

Other notable startups that have emerged from the nation include ecommerce platforms Tiki and Sendo, financial services company F88, and electric vehicle firm VinFast, which listed on the Nasdaq earlier this year.

Coming up next

Many investors and businesses have their eye on Vietnam, especially as tensions continue to mount between the US and China. The country’s position as a global manufacturing hub for both traditional sectors and the tech industry is expected to strengthen through the “China plus one” strategy, where foreign firms seek to diversify their manufacturing capabilities.

Vietnam benefits as well from having a relatively young and tech-savvy population. It’s also known for having a strong base of affordable and talented engineers, putting it in a prime position for tech and startup development.

Here are some key verticals that we anticipate will see significant growth in Vietnam on the road ahead:

• Fintech: 79% of people in Vietnam are unbanked or underbanked. E-wallets have become popular in the country, with MoMo and ZaloPay pulling ahead as leaders in the space. The lending sector in the country will be an exciting market – it is expected to have a compound annual growth rate of 56% from 2022 to 2025. There’s certainly opportunities for startups to drive greater financial inclusion in the country.
• Electric vehicles: VinFast’s listing on the Nasdaq has captured global attention. Vietnam’s EV scene is heating up, with firms like Selex Motors and DatBike joining the fray. The Vietnamese government has also announced a slate of measures to drive EV adoption and growth in the country, providing fertile ground for the industry to flourish even further.
• Web3: Vietnamese citizens are quite open to blockchain and digital assets. Around 6% of the population owned some form of crypto asset in 2022, and a survey by Decision Lab found that 53% of respondents expect to invest more in crypto this year. This makes the asset the second most popular investment vehicle, coming only behind traditional savings. The Vietnamese government is also keen on blockchain, having launched the Vietnam Blockchain Union, a legal entity that aims to develop the local ecosystem.

V is for Vietnam

While Vietnam is certainly coming up in the startup world, founders in the country also grapple with challenges around regulatory uncertainty and a lack of experienced tech talent. They contend with larger infrastructural difficulties and socioeconomic inequality as well.

For those able to navigate these waters, Vietnam represents a significant opportunity. If you’re a startup leader in the country looking for advice, community, and clarity on this journey, join us at our upcoming Founders Meetup: Vietnam in Ho Chi Minh City!

This is the second time our monthly Founders Meetup has gone to Vietnam, and we’re glad to help bring together startup leaders in the country to foster new relationships and conversations. Come down to The Hive Villa Thao Dien on November 30 to connect, learn, and exchange ideas on tackling the challenges that have come your way.

We’re currently running an early bird promotion, so tickets are now on sale at US$10 (U.P. US$12.50) each, inclusive of complimentary drinks. Spaces are limited, so be sure to get your ticket before we’re sold out.

We’ll see you there!

By Stefanie Yeo – TechInAsia.com – October 23, 2023