In Vietnam’s bustling startup ecosystem, where innovation drives progress, business incubation is emerging as a cornerstone for success. But what does it mean, and why should Vietnamese startup intermediaries—those vital support services like incubators, accelerators, and co-working spaces—care? Business incubation refers to the structured support provided to early-stage startups, offering resources, mentorship, and infrastructure to help them grow from fragile ideas into thriving enterprises. For intermediaries serving Vietnam’s 3,800 innovative startups, as noted in the “Overview of Startup Ecosystem of Vietnam 2024”, this process is key to fostering the next generation of MoMos and Sky Mavises. With government-backed support, and a dynamic market, Vietnam is ripe for incubation to shine. This article explores what business incubation entails and why it’s critical for Vietnamese startup intermediaries aiming to boost innovative ventures.
Business incubation is a nurturing process where intermediaries provide startups with essential tools—think office space, technical facilities, funding access, and expert guidance—to accelerate growth. It’s about creating a safe haven for innovators to test ideas, refine products, and scale sustainably. In Vietnam, this might mean an incubator in Ho Chi Minh City offering a tech startup shared labs to prototype an app, or a Hanoi accelerator connecting a fintech venture to investment connections.
The Vietnam Startup Ecosystem 2024 report defines “business incubation facilities” as entities supplying technical infrastructure, resources, and services to perfect new technologies and business models. This aligns with Vietnam’s ecosystem, where 45.14% of startups are in the pre-seed stage, per the 2024 report, needing hands-on seed stage support to move forward. Take Tiki’s early days: starting as a book retailer in 2010, it benefited from foundational support before scaling into an e-commerce giant with JD.com’s backing. Incubation bridges that initial gap, turning raw potential into market-ready solutions.
It’s not just about survival—it’s about thriving. With 80% of startups employing fewer than 50 people, as the report states, incubation ensures they grow steadily, avoiding the pitfalls of overextension. For intermediaries, it’s a mission to cultivate resilience and impact.
Vietnam’s innovative startup scene is vibrant yet challenging. The Vietnam Startup Ecosystem 2024 report highlights 3,800 startups, with unicorns like MoMo (over 30 million users) and Sky Mavis (over 2 million daily Axie Infinity players) showcasing potential. Intermediaries—spanning 21 incubation facilities and 7 accelerators by 2016, per the report—are the backbone of this ecosystem. Business incubation empowers them in three key ways.
First, it amplifies startup success rates. The report notes only 2.08% of startups reach Series C funding, reflecting high early-stage dropout rates. Incubation counters this by providing tailored support. The Vietnam Silicon Valley (VSV) initiative, launched in 2013 under project 1383/QĐ-BKHCN, exemplifies this—acting as a bridge between startups and investors, helping ventures like MoMo refine their payment platforms. Intermediaries using incubation can boost survival odds, turning pre-seed ideas into seed-stage successes.
Second, it aligns with national goals. The National Program 844 to “Supporting the National Innovation Initiative to 2025” (ISEV) aims to support 800 projects and 200 startups by 2025, emphasizing incubation hubs like the National Startup Support Center (NSSC). Intermediaries leveraging business incubation tap into this vision, accessing government resources and policies—like tax exemptions under project 94/2020/NĐ-CP for the National Startup Support Center (NSSC)—to enhance their offerings. This synergy fuels ecosystem growth, as seen in Hanoi and Ho Chi Minh City’s thriving startup clusters.
Third, it meets market demands. Vietnam’s 100-million-strong population, with 70% under 35, craves innovation. Incubation helps intermediaries guide startups to meet these needs—think Highlands Coffee scaling from a single shop in 1998 to a national chain through strategic growth. The report’s data on funding stages (30.56% in seed) shows startups need structured support to scale, a role intermediaries fulfill through incubation.
The path isn’t smooth. The Vietnam Startup Ecosystem 2024 report flags resource constraints—93.98% of startup capital is self-funded—and regulatory hurdles, like licensing delays for healthtech ventures. Intermediaries face fragmented data and inconsistent policies, as the report notes, complicating support efforts. Business incubation addresses these by offering shared facilities (reducing costs), regulatory navigation, and mentorship programs like the Global Mentoring Program cited in the report.
VinFast’s rise from a local automaker to a global EV player, despite regulatory challenges, mirrors what incubation can achieve—structured support turning ambition into action. For intermediaries, incubation is the toolkit to transform Vietnam’s “young” ecosystem, as the report describes, into a mature powerhouse.
For Vietnamese startup intermediaries, business incubation isn’t just a service—it’s a game-changer. It aligns with Vietnam Startup Ecosystem 2024 report’s call for a robust ecosystem, supporting ISEV’s ambitions. Whether you’re an incubator or an accelerator, incubation equips you to nurture the next unicorn through improved innovation capacity and market readiness.
