Startups seek the knowledge to flourish

According to Vu Quoc Huy, director of Vietnam’s National Innovation Centre (NIC), retail, financial services, healthcare, and education are the sectors that attracted the most capital inflows in the past year.

“Trusting Social, a fintech startup based on AI, raised $65 million; OnPoint, a platform providing solutions to support e-commerce development, raised $50 million; and Finhay Financial Startup, which owns a personal investment app with more than 2.7 million users, raised $25 million,” Huy said. “These were some of the biggest deals of 2022.”

New businesses are being urged to seek a network of experienced help to assist them in their profit quest, Photo: Shutterstock

Vinnie Lauria, founder and managing partner of Golden Gate Ventures, said Vietnam brings a combination of leading tech talent, an entrepreneurial culture, and a fast-growing domestic market. “Vietnam is assessed as the latest gemstone of Southeast Asia, and its emergence comes as a result of its market’s attractiveness to investors and the government’s support for the startup ecosystem,” he said.

Minister of Planning and Investment Nguyen Chi Dung also emphasised that innovative startups in Vietnam are increasingly attracting the attention of international and regional investors. In the first half of 2022, the number of successful deals in Vietnam accounted for around one-fifth of the total deals in the Southeast Asia region, with nearly $500 million in investment in technology fields.

Up to now, Vietnam has 20 private innovative startup investment funds established, with a total charter capital of more than $4.2 million.

“In order to promote innovative startups, the Ministry of Planning and Investment will study the possibility of developing a law that covers venture investment. At the same time, we will propose a mechanism to establish a fund to support innovation with funding mobilised from social capital sources instead of the state budget,” Minister Dung said.

Within the framework of Vietnam Venture Summit late last year, around 40 funds committed a total of $1.5 billion of investment over the next two years. According to the NIC, the total value of Vietnam’s innovative startup investment in the 2023-2025 period is expected to reach $5 billion.

However, the actual success rate of new startups is estimated at only 3-5 per cent. Experts assessed that Vietnamese startups, while facing the same common challenges as the rest of the region such as lack of capital, experience, and a clear strategy, have yet to make the most use of available resources to support their business operations and development.

“New businesses need to equip themselves not only with the necessary skills in business, but also in technology. They need to know how to use technology as a tool to drive their business growth, from market research to product development and business scaling,” said Nguyen Quynh Tram, general director of Microsoft Vietnam.

“They must also build for themselves a network of experienced professionals in the business field so that they can be consulted, oriented and commented on their development strategies,” Tram added.

According to Le Hoang Uyen Vy, co-founder of Do Ventures, the first nine months of 2022 saw a decrease of 17.9 per cent in total investment compared to the same period last year, reaching $494 million with 94 deals.

“However, this is not a big decrease compared to other countries, and a good sign is that the number of transactions reaching $10-50 million is almost equal to the whole year of 2021. This means companies that entered pre-Series A and Series A last year have grown to the next stage,” Vy assessed.

“Although there is a certain decrease in capital in 2022, I do not view it negatively, as businesses will pay more attention to product development strategies as well as their long-term future,” she added.

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