Investment into startups up 34 per cent in first quarter

May 04, 2021 | 18:43
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While the number of deals decreased in the first quarter of the year, capital pouring into startups in Vietnam increased significantly.
investment into startups up 34 per cent in first quarter
Startups are raising far more funds than in previous years. Photo: BBVA

The first-quarter report of South Korean venture fund Nextrans showed that investment in startups jumped by 34 per cent on-year to $100 million, with foreign investors being dominant.

However, the number of deals fell 20 per cent to 16. This decrease is quite small compared to the 20 deals in 2020 and 30 deals in 2019. Despite the reduction, the total deal value has increased remarkably by 34 per cent on-year, excluding unannounced deals.

Foreign investors outperformed their local counterparts with nine deals, the report said. The total investment by local actors was under $10 million, while it was $100 million for foreign investors.

Seed funding and Series A investment, the first two stages, remained dominant, accounting for 70 per cent of deals, much higher than in 2020 and 2019.

Fintech once again led with four of the 16 deals, followed by logistics, hospitality, real estate, education, and healthcare.

Vietnam is expected to grow at the fastest rate in Southeast Asia in terms of digital financial services revenue in the next five years, reaching $3.8 billion by 2025, the report said.

The most notable deals in the first quarter were an investment of $2.6 million from a group of investors led by Singaporean venture capital firm Jungle Ventures in electric motorbike brand Dat Bike, and a $1 million investment by investment fund AppWorks in healthcare service booking platform Docosan.

There are around 180 venture funds in Vietnam, including VSV Capital – Vietnam Silicon Valley, Mekong Capital, 500 Startups Vietnam, Vietnam Investment Group, IDG Ventures Vietnam, and Nextrans while others from South Korea and Japan are also looking for opportunities to invest.

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