Vietnam’s startup ecosystem has witnessed rapid growth in recent years, attracting significant attention from both domestic and international investors. The combination of government support policies and the strong entrepreneurial spirit of founders has driven the emergence of a new generation of startups. These companies are built on intellectual property and innovative business models, offering the potential for global market expansion.
Despite their innovative ideas and promising growth prospects, Vietnamese startups face severe financial challenges in their early stages. The lack of initial capital and sustainable cash flow management makes it difficult for many startups to survive and scale. This has led to the increasing importance of venture capital (VC) funds, which serve as a critical financing channel, providing necessary resources for startups while allowing investors to capitalize on high-risk, high-return opportunities.
Overview of Vietnam’s Startup Landscape
According to the National Agency for Technology Entrepreneurship and Commercialization (NATEC) under the Ministry of Science and Technology, Vietnam currently has approximately 3,800 startups. Among them:
- 11 startups have a valuation exceeding 100 million USD.
- 2 startups have achieved unicorn status (valued at over 1 billion USD), including Momo, and Sky Mavis.
Vietnam is now considered one of the three key startup hubs in Southeast Asia, alongside Singapore and Indonesia. The country possesses a unique combination of top-tier technological talent and a deep-rooted entrepreneurial culture, making it an increasingly attractive destination for global venture capital investors.
Investment Channels for Startups in Vietnam
Startups in Vietnam typically raise capital through a diverse range of investment sources, including:
- Government grants and support programs.
- Foreign venture capital funds.
- Domestic venture capital funds.
- Corporate venture capital (CVC) funds from big corporates.
- Incubators and accelerators supporting early-stage startups.
- Angel investors.
- Bank loans and financial institutions providing working capital.
A significant milestone for the Vietnamese startup ecosystem was the introduction of Decree No. 38/2018/ND-CP in 2019. This decree provides a legal framework for startup investment and facilitates the establishment of local venture capital funds. As a result, the country now has nearly 40 domestic VC funds, collectively managing more than 100 billion VND (approximately 4.2 million USD) in capital. While this amount remains modest compared to foreign investments, it marks a crucial step toward developing a sustainable domestic funding ecosystem for startups.
Dominance of Foreign Venture Capital and Key Challenges
Foreign venture capital (VC) funds continue to dominate the Vietnamese startup landscape. In 2021, total venture capital investment in Vietnamese startups reached 1.4 billion USD, with 90% of this capital coming from foreign investors. This dominance can be attributed to several key factors. First, established foreign VC ecosystems, particularly in countries like the United States, have a long history dating back to the 1950s, whereas Vietnam’s ecosystem is still in its early stages. Additionally, international VC funds have significant capital reserves and well-diversified portfolios, enabling them to invest across multiple industries with a higher risk tolerance. Moreover, foreign investment ecosystems benefit from more liquid capital markets, providing investors with greater flexibility to enter and exit markets due to high liquidity and fewer regulatory barriers.
Due to the dominance of foreign investments, many Vietnamese startups are required to restructure their business models to align with foreign investor requirements. One of the most notable trends is the “offshore parent company” structure, in which investors require Vietnamese startups to establish a holding company in Singapore before receiving investment. This practice requires Vietnamese shareholders to go through a dual investment process, which involves establishing a parent company abroad, such as in Singapore, and then registering foreign direct investment (FDI) from the parent company back into Vietnam. This complex restructuring process is not unique to Vietnam but is also commonly observed in other emerging markets such as Indonesia, Malaysia, the Philippines, and China.
Investment Trends in 2023 and Future Outlook
Venture capital investment in Vietnam has slowed down due to global economic uncertainties. In 2023, total VC investment fell by 17% to 529 million USD, while the number of deals dropped by 40%, reaching the lowest level since 2018. The most significant decline was in early-stage investments, particularly deals under 500,000 USD, which fell by 50%, reflecting increasing investor caution. However, mid-sized deals ranging from 10 million to 50 million USD remained stable, indicating the growing maturity of more established tech companies within Vietnam’s startup ecosystem.
Despite short-term challenges, Vietnam remains a top investment destination in Southeast Asia for long-term investors. According to a Bain & Company report, investment in Vietnamese startups is expected to grow by 83% between 2025 and 2030, as investors continue to recognize Vietnam’s strong economic fundamentals and growing tech sector.
Investment in first 9 months of 2024
Venture capital investment in Vietnam has slowed down for the third consecutive year. In the first nine months of 2024, publicly announced VC investment reached 372 million USD, reflecting continued cautious sentiment among investors.
| Company | Sector |
| Banh mi xin chao | Retail |
| Native | Education |
| Eatron Technologies | Electric Vehicle |
| Be | Transportation |
| SCP | Financial Services |
| Selex | Electric Vehicle |
| iCare | Healthcare |
| CarNow | Transportation |
| 1Long | Financial Services |
| POC Pharma | Healthcare |
| Quickom | Comms and Communities |
| TechCoop | Agriculture |
| Communi | Business Automation |
| Kamereo | Others |
| ScaleUP | Business Automation |
| Alterno | Others |
| Nhi Dong 315 | Healthcare |
| Kapla | Education |
| AWC | HRTech |
| Prep.vn | Education |
| Wecare247 | Healthcare |
| Vigo | Retail |
| FIVO | Retail |
| Everyhalf | Retail |
| MVillage | Travel & Hospitality |
| Vietcetera | Entertainment / Non-gaming |
| Saner.ai | AI |
| Nami Distributed Energy | Green Tech |
| Beta Media | Entertainment / Non-gaming |
| Reforged Labs | Advertising and Marketing Technology |
| TrueDoc | Healthcare |
| DatBike | Electric Vehicle |
| eCentric | Retail |
| Happynest | Retail |
| Finviet | Financial Services |
| VEEP | Green Tech |
| Urbox | Advertising and Marketing Technology |
| Vucar | Retail |
The Future of Startup Investment in Vietnam
To ensure sustainable growth and investment inflows, Vietnam must focus on developing a more transparent and investor-friendly startup ecosystem. This includes:
- Expanding domestic venture capital funds to reduce reliance on foreign investment.
- Creating clearer and more flexible regulations to streamline investment procedures.
- Facilitating easier capital entry and exit mechanisms to attract global investors.
- Encouraging corporate venture capital (CVC) investment from local big corporates.
- Strengthening financial and legal advisory support for startups to navigate regulatory hurdles effectively.
By addressing these challenges and opportunities, Vietnam has the potential to establish a more dynamic and self-sufficient startup ecosystem, ensuring continuous capital flow and fostering innovation-driven growth in the coming years.
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Access Full Report – Vietnam Startup Investment Policy Report 2024 – Key Insights
