The COVID-19 pandemic has posed significant challenges to economies worldwide. However, it has also served as a catalyst for digital transformation. In Vietnam, after a year of slowdown, the innovation and startup scene has rebounded and reached new heights. This report, co-authored by the National Innovation Center (NIC) and Do Ventures, provides a comprehensive overview of Vietnam’s venture capital landscape in 2021 and offers insights into the country’s innovation and startup ecosystem.
I.Venture Capital Surge in Vietnam
Despite market uncertainties and upheaval caused by the pandemic, venture capital investment in Vietnamese startups reached a record high in 2021. The total funding amount soared to $1.4 billion, marking a remarkable 1.6 times growth compared to the previous record of $874 million set in 2019. This surge in investment can be attributed to increased investor appetite for sectors that have thrived during the global pandemic. Furthermore, the ease of video conferencing has eliminated travel restrictions as a barrier to investment decision-making. NIC has been actively strengthening Vietnam’s innovation ecosystem through three key activities: policy reinforcement, ecosystem development, and business empowerment.
II.Contribution to Promote Innovation in Vietnam
The venture capital investment in Vietnam has transcended all previous records, reaching $1.4 billion in 2021. This significant increase far surpasses the figure of $451 million recorded the previous year. The total deal count also witnessed a substantial rise, reaching 165 in 2021, a 57% increase compared to 2020. Notably, Vietnam witnessed the birth of two new unicorns in 2021: Sky Mavis, valued at nearly $3 billion, and MoMo, valued at more than $2 billion.
The volume of $10 million+ deals hit a record high of $1.2 billion, accounting for 82% of total investment proceeds in 2021, compared to 74% in 2020 and 79% in 2019. Additionally, smaller deals also experienced a surge, reaching a new high of $256 million, a remarkable 119% increase from the previous year. The distribution of capital across various sectors indicates a stable growth of Vietnam’s startup ecosystem.
III.Overall Market Landscape in Vietnam
Several sectors in Vietnam witnessed considerable increases in funding, with new records set in areas catalyzed by the pandemic. Payment and Retail remained dominant areas of interest, thanks to mega deals involving VNLIFE, MoMo, and Tiki. The Gaming sector also received a significant boost with the contribution of globally recognized startup Sky Mavis. Other sectors that experienced noteworthy growth include Education, Healthcare, and Business Automation.
The General Marketplace segment, which represents the earliest generation of online retail, received the highest funding amount in 2021, followed by Vertical Commerce, which involves startups specializing in specific product categories. The unbundling of retail in terms of product categories and value chain has paved the way for startups providing backend and infrastructure solutions or engaging in B2B/Distribution activities.
In conclusion, startups in Vietnam have played a pivotal role in addressing the challenges posed by the COVID-19 pandemic. They have offered solutions such as delivery services, online education, telework, telehealth, and digital payments, among others. Digital technologies have also enabled businesses to survive and thrive during the crisis. In the post-COVID world, deploying cutting-edge technology has become imperative, and startups will continue to be the lifeblood of a competitive economy. They will create new employment opportunities, offer consumers choices, and challenge legacy businesses. Therefore, tech companies will continue to drive economic recovery.
Key Points Summary
- Venture capital investment in Vietnamese startups reached a record high of $1.4 billion in 2021, indicating significant growth and investor confidence in the country’s innovation ecosystem.
- The total deal count increased by 57% in 2021, demonstrating a thriving startup scene with a growing number of successful funding rounds.
- The emergence of two new unicorns, Sky Mavis and MoMo, valued at nearly $3 billion and over $2 billion respectively, highlights the potential for high-value startups in Vietnam.
- $10 million+ deals accounted for 82% of total investment proceeds, indicating a strong interest in larger-scale investments and substantial financial support for promising startups.
- Smaller deals also saw a substantial increase, reaching a new high of $256 million, showcasing a diverse investment landscape and opportunities for startups of various sizes.
- Payment and Retail sectors remained dominant areas of interest, while other sectors like Gaming, Education, Healthcare, and Business Automation experienced significant funding growth.
- The General Marketplace segment received the highest funding amount in 2021, followed by Vertical Commerce, reflecting the evolution of online retail and specialization within different product categories.
- Startups have played a vital role in addressing challenges posed by the pandemic, offering innovative solutions and leveraging digital technologies to adapt and thrive in the post-COVID world.
- Startups will continue to be the driving force behind Vietnam’s economic recovery, creating new employment opportunities, providing consumer choices, and challenging traditional businesses.
In light of Vietnam’s vibrant innovation ecosystem and the opportunities it presents, we encourage you to contact our Vietnam team for support. We are committed to helping businesses navigate the dynamic Vietnamese market and leverage the potential for growth and success.
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