Overview of the current landscape
Most startups in Vietnam are still in the early fundraising stages, primarily in the Pre-seed and Seed rounds. Notably, the Pre-seed round accounts for the highest proportion, with 45.14% of all startups. This is the earliest stage in the funding journey, where businesses are still shaping their ideas and testing their initial products or services. At this phase, financial resources are crucial for assessing feasibility, exploring market potential, and conducting preliminary research – laying the groundwork for future development. The high percentage of Pre-seed startups highlights that many businesses are still in the formation stage, emphasizing the significant demand for venture capital and support from angel investors, small investment funds, and startup incubation centers.
The Seed round follows, representing 30.56% of startups. At this stage, businesses typically have a basic product or service and require funding to scale operations and expand their market presence. Companies focus on strengthening production capacity, building a skilled team, and developing customer networks. The high proportion of startups in this round indicates that many have moved beyond the conceptual stage and are actively entering the market with minimum viable products (MVPs). However, challenges such as securing capital, scaling operations, and navigating market competition remain substantial hurdles.
Progression to later funding rounds
Startups reaching the Series A round constitute 17.36% of the total. This stage involves raising larger investments to scale business operations, enhance product development, and capitalize on specific market opportunities. The significantly lower percentage of Series A startups compared to Pre-seed and Seed suggests that only a limited number of companies possess the necessary potential and resources to advance further in the funding process.
The proportion of startups successfully securing funding in the Series B and Series C rounds stands at 2.78% and 2.08%, respectively. These rounds cater to high-growth startups that have established their market value. The primary objectives include expanding market share, improving product offerings, and strengthening brand positioning. However, the small percentage of startups at these stages reflects the reality that few Vietnamese startups have scaled sufficiently to attract funding at this level.
Only 2.08% of startups progress beyond Series C, reaching a stage where they have stable revenue and are preparing for significant milestones such as initial public offerings (IPOs) or international expansion. The minimal representation of startups at this level underscores the fact that the majority of Vietnamese startups remain in the early stages of development, with few reaching the maturity required for large-scale growth strategies.
Implications for Vietnam’s Startup Ecosystem
The current funding distribution among Vietnamese startups highlights a young and evolving ecosystem with a high demand for early-stage capital and developmental support. To accelerate growth, policymakers must promote venture capital investments and implement targeted initiatives to support startups in their formative stages.Simultaneously, startups must focus on product refinement, building sustainable business models, and developing effective market-entry strategies. Collaborating with investment funds and startup support organizations will be instrumental in fostering a resilient and dynamic startup ecosystem, ultimately driving Vietnam’s economic development and innovation landscape forward.
