Activation phase (2013–2016)
The activation phase marks the beginning of Vietnam’s startup ecosystem, where the government initiated the first policies and programs to foster entrepreneurial activities. During this period:
– The Vietnam Silicon Valley (VSV) program was launched in 2013, providing financial support and mentorship to early-stage startups.
– The Innovation Partnership Program (IPP2), a collaboration between Vietnam and Finland, played a pivotal role in capacity building and startup acceleration.
– Decision No. 844/QĐ-TTg was issued by the Prime Minister in 2016, formally establishing the national project to support startups, known as Project 844.
– The number of startups grew significantly, with approximately 1,800 startups, 21 incubators and 7 accelerators established nationwide.
This phase set the legal and infrastructural foundation necessary for Vietnam’s startup ecosystem to take off, attracting initial interest from foreign investors and laying the groundwork for further growth.
Globalization phase (2017–2020)
With a strong foundation in place, Vietnam’s startup ecosystem entered a phase of rapid growth, characterized by increased investment and global integration. In 2017, Vietnam passed the Law on Supporting Small and Medium Enterprises (SMEs), which included policies specifically for startups. The venture capital market started to develop, with both domestic and international investors showing interest in high-potential Vietnamese startups. By 2019, Vietnam ranked 3rd in ASEAN in terms of startup ecosystem growth, behind only Indonesia and Singapore. The number of startups doubled, surpassing 3,000 active startups, with fintech, e-commerce, and AI emerging as leading sectors. Several Vietnamese startups achieved unicorn status, including MoMo and VNG, demonstrating the ecosystem’s growing maturity. During this phase, the ecosystem witnessed stronger government backing, including tax incentives and investment-friendly regulations, helping local startups attract global funding and partnerships.
Attraction phase (2021 – present)
Despite the challenges brought by the COVID-19 pandemic, Vietnam’s startup ecosystem has demonstrated resilience and continued development.
In 2021, venture capital investment reached a record $1.4 billion, showcasing investor confidence in Vietnam’s startup potential. Key policies, such as Decision No. 188/QĐ-TTg (2021), were introduced to enhance Vietnam’s integration into global startup ecosystems. A more structured network of incubators, accelerators, and startup hubs has emerged, with over 200 support organizations. The ecosystem has diversified, with edtech, healthtech, green startups, fintech and e-commerce startups. With Vietnam now ranked 56th globally in the Startup Ecosystem Index (StartupBlink 2024) and cities like Hanoi, Ho Chi Minh City, and Da Nang becoming recognized startup hubs, the country is poised to become a major player in the regional innovation landscape.
The road ahead
Looking forward, Vietnam’s startup ecosystem still faces challenges, including regulatory improvements, access to capital, and fostering deep-tech innovation. However, with continued government support, increasing foreign investments, and a growing pool of entrepreneurial talent, the ecosystem is expected to sustain its upward trajectory.
Sources: National Agency for Technology Enterprises and Commercialization Development, Ministry of Science and Technology
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