Due to Vietnam’s aspirations to have a fully digital society by the year 2030, the startup sector in the nation is booming. The goal of the government is to double the present 14% proportion of the digital economy in the GDP to 20% by 2025. As a result of this lofty objective, authorities have announced the opening of new startup assistance centers in Hanoi, Da Nang, and Ho Chi Minh City. A roadmap for fostering scientific innovation was also unveiled, with commitments to devote 1% of GDP to this endeavor.
According to a recent analysis by venture capital firm Do Ventures and the National Innovation Center, a government agency under the Ministry of Planning and Investment, Vietnam’s startup sector drew a lot of investor interest in 2022. Last year, it came in fourth in terms of deal value and third in terms of deal count in Southeast Asia, with domestic funds making up 45% of all deal value. However, the total amount invested in Vietnamese startups in 2022 was only $634 million, a 56% decrease from the record-breaking $1.4 billion invested in 2021.
Despite this slump, the nation still has a number of IT unicorns, including the blockchain player Sky Mavis, the developer of the NFT-based game Axie Infinity, and the gaming startup-turned-conglomerate VNG. Other names making waves include TopCV, which concentrates on resume building tools for job searchers, and M Village, which provides co-living housing for young professionals.
Fintech is one of the most in-demand sectors for funding in Vietnam’s startup scene. Electronic payment solutions provider VNPay has made waves with its success, having raised $300 million in a recent funding round. Its payment gateway is used by over 40 banks and 30,000 merchants in Vietnam. Meanwhile, the Vietnamese government has also launched a digital banking project that aims to provide financial services to 95% of the population by 2025.
Another sector that is attracting investor interest is retail. Vietnam’s retail market is one of the fastest-growing in the region, with a compound annual growth rate of 10.2% between 2013 and 2018. E-commerce platforms like Tiki and Shopee have been successful in this sector, with Tiki raising $130 million in a recent funding round. The platform has over 100,000 sellers and 6 million customers across Vietnam.
Healthcare and payments are also sectors of interest in Vietnam’s startup scene. The Vietnamese government has launched a healthcare reform program that aims to increase the quality of healthcare and reduce the burden on the state. Startups like Edoctor, which provides online medical consultations, have been successful in this sector. Meanwhile, payment platforms like Momo have been successful in providing mobile payment solutions to a country where many people do not have access to traditional banking services.
Vietnam’s digitalization efforts have played a significant role in fueling the country’s startup scene. The government’s push to become a fully digital society has created opportunities for tech entrepreneurs to develop innovative solutions that address the country’s unique challenges. For example, the lack of traditional banking services in Vietnam has led to the development of mobile payment solutions. Additionally, the country’s fast-growing retail market has been further fueled by the rise of e-commerce platforms, which offer customers greater convenience and access to a wider range of products.
Vietnam’s digitalization efforts have also been driven by local tech talent. Many tech entrepreneurs have been trained overseas but have returned to Vietnam to take advantage of the country’s growing startup scene. This has created a vibrant ecosystem of tech companies that are pushing the boundaries of what is possible in Vietnam’s digital landscape.
While Vietnam’s startup scene is thriving, it still faces several challenges. Access to capital is one of the major issues, with many businesses finding it difficult to obtain the cash they require to expand. Additionally, the country’s legal and regulatory framework can be difficult to navigate, with many startups struggling to comply with regulations in areas like data privacy and intellectual property.
Despite these challenges, the future looks bright for Vietnam’s startup scene. The government’s commitment to digitalization and innovation is creating a favorable environment for tech entrepreneurs to thrive. Additionally, the country’s young and tech-savvy population is eager to embrace new technologies and ideas. With the right support and investment, Vietnam’s startup scene has the potential to become a major player in the global tech landscape.
Vietnam’s digitalization efforts are fueling a thriving startup scene that is attracting investor interest from around the world. Fintech, retail, healthcare, and payments are some of the most in-demand sectors for funding. The country’s commitment to becoming a fully digital society by 2030 has created opportunities for tech entrepreneurs to develop innovative solutions that address the country’s unique challenges. With the right support and investment, Vietnam’s startup scene has the potential to become a major player in the global tech landscape.
First reported by CNBC.
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