Speakers at the Vietnam Innovation Forum titled “Sailing the digital sea” in HCM City on Thursday. — Photo Courtesy of NIC

HCM CITY — Investors hold an optimistic view of the country’s start-up eco-system, according to the 2023 Việt Nam Innovation and Tech Investment Report.

Released by the Việt Nam National Innovation Centre (NIC) and Do Ventures at the Vietnam Innovation Forum titled “Sailing the digital sea” in HCM City on Thursday, it was the third annual report.

It said: “Despite the turbulent global investment climate, Việt Nam remains a favoured destination for investors due to its sturdy economic growth and skilled young workforce.”

The most common advice given to start-ups was to focus on the fundamental aspects of business, utilise capital wisely with a strategic approach and adjust to changes in the economic climate.

The country's venture capital developments began to reflect global economic distress.

So, despite a strong economic rebound, there was a 56 per cent decline in venture capital deal values from the previous year. The latter half of 2022 was particularly challenging, with a 65 per cent drop due to the intensifying global tech crunch.

But there was a rise in deal count, suggesting sustained funding momentum despite the global headwinds. 

In spite of the funding winter, investors continued to express interest in Vietnamese start-ups, with only a minor decrease in the number of foreign funds investing in last year. 

In a noteworthy development, Vietnamese investors took the lead as the most active investors for the first time, jointly holding top position with their Singaporean counterparts. Local venture capital firms continued to play an important role with an increasing impact on local start-ups. 

There was steady growth in the number of US$10-50 million deals, indicating that companies that raised pre-A and series A rounds last year had progressed to the next stage of growth.

But the number of $50million+ deals saw a sharp drop that caused an overall slump in total deal value. 

The financial services sector received the most significant funding following a remarkable 249 per cent rise.

Fintech deals displayed resilience, accounting for 38 per cent of the total capital invested, up 4 percentage points from the previous year.

Though the retail sector experienced a decline of 57 per cent, it remained the second most active vertical. Healthcare, education and payments continued to be among the most funded sectors. 

‘Sailing the digital sea’

The Việt Nam Innovation Forum was a joint effort by the NIC, Forbes Vietnam and Do Ventures to encourage and promote innovation. 

It brought together leading investors, tech conglomerates and start-ups from Southeast Asia such as unicorn Insider, SK Group, STIC Investments, and Golden Gate Ventures. 

It gave an overview of innovation activities in Việt Nam in 2022 and shared the latest technology trends and foreseeable changes, identifying opportunities for Việt Nam to seize in future.   

Participants made vital proposals for the Government for removing difficulties and obstacles and building a conducive investment and business environment. 

Deputy Minister of Planning and Investment Trần Huy Đông told the forum that the Government had assigned his ministry to amend the regulations on launching a venture capital fund in accordance with international practices.

According to Google and Temasek, Việt Nam’s digital economy will be worth $43 billion by 2025. 

Last year, the country reported the fastest growth in Southeast Asia in the digital economy, which rose by 28 per cent from $18 billion to $23 billion. — VNS