Thailand
Vietnam a rising star in SE Asia start-up landscape, report says
Vietnam is a rising star of Southeast Asia start-up scene and will become the third-largest ecosystem in the region in 2022, according to venture fund Nextrans Vietnam.
A report by Nextrans said that there were about 3,800 start-ups in Vietnam, of which four were unicorns and 11 were valued at over $100 million.
Last year, investment poured into Vietnamese start-ups reached more than $1.3 billion. Fintech was the leading sector in terms of total deal value, with two deals worth over $100 million.
Notably, VNLife successfully raised more than $250 million in a Series B funding round in July. Last month, Momo followed suit with an investment of $200 million.
After fintech, e-commerce is the second most attractive sector to investors. Tiki made the largest contribution with a Series E funding round of $258 million led by AIA.
Undoubtedly, Vietnam has emerged as a start-up hub that is catching up with countries like Indonesia and Singapore, the report added.
Speaking at The National Startup Festival 2022, Vietnam Chamber of Commerce and Industry president Pham Tan Cong noted that Vietnamese people have a strong start-up spirit.
The country was ranked 44th out of 132 countries in the Global Innovation Index and 59th out of 100 regarding the start-up ecosystem in 2021. It also came third in the list of most-active start-up ecosystems in Southeast Asia.
He believed such achievements could be attributed to the favourable government policies on start-ups in recent years.
“Vietnamese government has gone great lengths to improve the business environment in favour of start-ups”, Cong said.
A report jointly prepared by National Startup Support Centre and BambuUp highlighted that Vietnam was emerging as a dynamic economy and a development hub for innovative start-ups in the Asia-Pacific.
Last year’s first nine months saw a record high number of $500,000-$3 million deals in fundraising, 2.58 times higher than the same period of 2020.
There was a shift in the investment allocation ratio at different stages as well. The proportion of rounds $500,000-$3 million and $3-10 million went up whereas investments in pre-seed and seed stages fell.
Nine-month Series A investments hit a record of 37 deals, the highest in years. As for Series B, the deals reached the largest average value ($13 million) since 2013.
The report also showed that the weakness facing most start-ups was reaching customers and generating revenues.
Stiff competition from direct and indirect competitors was the biggest concern for those involved in innovative activities.
Vietnamese start-ups are expecting the government to step up investment in digital infrastructure to make business operations faster and more efficient.
The government was also urged to supplement and clarify more detailed regulations to support domestic firms in terms of facilities, equipment and tax incentives, the report added.
At the national festival, the director of National Agency for Technology Entrepreneurship and Commercialisation Development Pham Hong Quat revealed that Vietnam had more than 200 venture funds, 100 business promotion organisations and 130 universities and colleges that nurture innovations to date.
As the room for growth was still ample, Quat called for more favourable mechanisms that would pave the way for new innovative start-ups.
To this end, the government was recommended to use public procurement as a stimulus to foster technology innovations.
The director also suggested a “start-up visa” policy that would enable foreign entrepreneurs and start-up founders to initiate their businesses in Vietnam with ease.
As crowdfunding was becoming a norm in the world, this practice of fundraising should be piloted in Vietnamese start-ups to test its feasibility, Quyet added.
“Many countries in the region have introduced trading floors for the start-ups that are not eligible for Initial Public Offering. We should do likewise”, said the director.
Ivo Sieber, the Swiss ambassador to Vietnam, stressed that a favourable legal framework was the key to the success of innovative start-ups. Education was another factor that would play a major role in start-up incubation.
“Entrepreneurial spirit and start-up spirit should be nurtured in the educational system”, said the Swiss ambassador.
VIET NAM NEWS/ASIA NEWS NETWORK