Vietnam an attractive spot for startups: Bloomberg

In 2021, Vietnam drew a record 2.6 billion USD through 233 private deals, up from 700 million USD via 140 deals of the previous year. (Photo: baodautu.vn)

Washington – Bloomberg on February 14 published an article “Silicon Valley talent is helping grow Vietnam’s startup hub”, quoting founders’ opinion that an abundance of inexpensive engineers coupled with a fast-growing economy makes Vietnam an attractive spot for startups.

The article cites a report published in July 2022 by KPMG International Ltd and HSBC Holdings Plc which states that the number of startups in the country nearly doubled from the beginning of the COVID-19 pandemic to mid-2022,

Some of the world’s largest investors including Sequoia Capital, Warburg Pincus LLC, and Alibaba Group Holding Ltd are backing startups offering promising solutions.

According to data from Google, Temasek Holdings Pte., and Bain & Co, in 2021, Vietnam drew a record 2.6 billion USD through 233 private deals, up from 700 million USD via 140 deals of the previous year.

According to investment firm Do Ventures, local startups are also competing against businesses from throughout Southeast Asia. Investment in startups in Vietnam accounts for 13% of the total venture funding flows into the region after Indonesia and Singapore in 2021.

Bloomberg’s article also mentions the Vietnamese Government aims to turn Ho Chi Minh City into a magnet for tech funding and is striving to grow its digital economy which is expected to represent 40% of the southern city’s gross domestic product.

The city’s authorities thus prioritise attracting foreign investment to high-tech projects, while also offering other incentives to lure global talent and international firms to establish innovation research centres.

Experts said that Ho Chi Minh City has factors to make it the next Silicon Valley including a heavy math and science educational system, a decades-old software outsourcing industry that’s created an abundance of inexpensive and talented engineers, and the benefits of Vietnam’s 2021 economic growth - one of the fastest across Asia.

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Startups seek the knowledge to flourish With the venture capital market in 2022 deemed generally gloomy with total investment and number of deals falling globally, more work is to be carried out for new companies in Vietnam to survive.

Promoting potential in fit-for-purpose startup scene Vietnam is expected to be on fire with emerging startups and innovative technologies as 2023 unfolds. Herston Elton Powers, managing partner of 1982 Ventures, discussed with VIR’s Luu Huong on how to build an appropriate setting for the tech ecosystem, and several trends that are more likely to catch on this year.

Vietnamese startups raise $855 million in 2022 Vietnamese startups secured $855 million in fresh funding in 2022, which is only one-third compared to the value in 2021, according to a recent report by Nextrans.