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Vietnam is the third most active tech ecosystem in Southeast Asia
Using a mobile app, truck drivers in Vietnam can now opt to pick up cargo from nearby locations on their empty vehicles during their return trip, thus earning extra income. In the past, up to 70% of trucks return home empty.
For a country beset by high transportation costs owing to a highly fragmented logistics market and heavy traffic, LOGIVAN – dubbed the Uber for trucks – addresses Vietnam’s inefficiencies in logistics, an industry estimated to be worth almost a quarter of its national GDP.
Founded by Cambridge-educated Linh Pham, LOGIVAN is one of Vietnam’s many startups looking to capitalise on its young, educated, tech-savvy, and burgeoning middle class.
With a 70% internet penetration rate and a returning diaspora of overseas talent, Vietnam is poised to reap the rewards of technological disruption. Begging to be solved are inefficiencies in supply chain, retail, fintech, and education.
In fact, it is now the third most active startup ecosystem in Southeast Asia, lagging just behind Indonesia and Singapore.
A recent report by Cento Ventures and Vietnam’s leading early-stage venture fund ESP Capital reveals that Vietnam has seen its number of deals grow sixfold from 2017 to 1H2019.
Digital technologies the likes of retail and payment made up nearly 60% of funds raised.
Vietnam is also expected to end this year with a bang with more than US$ 800 million raised in total in 2019.
While it has no doubt benefited from the US-China trade war, Vietnam has for the past few years been laying the right foundation for attracting the hottest startups.
VNG Corporation, which started out as a gaming company in 2004, became Vietnam’s first ever unicorn in 2016 when it was valued at US$ 1 billion.
This multi-platform online company along with Tiki and VNPay captured 63% of the US$ 245 million raised in H12019.
Enabling the growth of the country’s thriving startup ecosystem are a mix of private and public programs such as the Founder Institute, Vietnam Silicon Valley, Saigon Innovation Hub, Business Startup Support Center, and SpeedUP Vietnam.
Just earlier this year, the Ministry of Planning and Investment (MPI) unveiled lofty targets for Vietnam’s startup scene. It aims to have at least five homegrown tech unicorns by 2025, and 10 by 2030.
Moreover, the government recently signed off on a tax waiver for startups during their first four years of operations, along with a 50% discount on taxes for their subsequent nine years.
With its favourable demographics, rising adoption of digital technologies, and excellent government support, Vietnam might have all its stars aligned to be Southeast Asia’s hottest space to watch in tech.
Source: Aseaneconomist