Vietnam’s startup market expected to continue booming in 2022

Illustrative image. (Photo: vneconomy.vn)

Hanoi – Vietnam is a "rising star" and will emerge as the third-largest startup ecosystem in Southeast Asia in2022, according to a report by venture capital firm Golden Gate.

Along with the development of startup ecosystem, Vietnam is considered as one of the most attractive destinations for venture capital funds in Southeast Asia, said the report "Southeast Asia Ecosystem 2.0".

Le Han Tue Lam, General Manager at Nextrans, a Korean Venture Capital in Asia, predicted that venture capital flows into Vietnamese start-ups will continue to increase in the coming years, but there will be differentiation.

Similarly, Phan Minh Tam, Chairman of STI Holdings, said that capital flows will increase in 2022, but investors will make a more rigorous selection.

"COVID-19 causes difficulties for many industries, but also creates advantages for others. In this context, the company that can survive will be the beneficiary," said Tam.

According to Pham Hong Quat, Director of the Department of Market Development and Science and Technology Enterprises under the Ministry of Science and Technology, domestic and foreign investors are interested in some sectors such as N2TP (Layer 2 Tunneling Protocol) in the field of Medtech, GIMO in Fintech is funded by BK Fund, or Propzy in Proptech is invested by FEBE Ventures. Besides, logistics is also a concern of investors.

In 2021, the world witnessed the rise of Vietnam as a pioneer in blockchain game development, welcoming the Metaverse (virtual world) movement. Such games as Axie Infinity, My DeFi Pet, Faraland, MeebMaster, Theta Arena, Sipher and HeroFi have created a strong motivation for Vietnamese businesses and start-ups.

In fact, a series of blockchain game projects have attracted hundreds of millions of dollars in investment like Sky Mavis. However, this field has not been recognised by the State and there has no clear legal corridor.

Large investment funds believe that 2022 will be the booming year of the Metaverse wave. Vietnam will be the focus of this wave.

Dao Quang Binh, Head of Market Development Department of Techfest 2021, said technology is changing much faster than policy, citing Axie Infinity game as a typical example.

Vietnamese blockchain companies are not inferior to other countries. It is necessary for management agencies and businesses to work together to promote investment and development activities in this field to new development, he said, adding that this would help avoid wasting resources when many innovative enterprises related to new technology in Vietnam have had to go to other countries to start up.

Nguyen Dinh Thang, Chairman of the Vietnam Digital Startup Club (VDI), said that Artificial Intelligence (AI), Big Data, 5G, Internet of Things (IoT), and automation are considered as new technology trends this year. COVID-19 is seen as a test, but also a push to accelerate the application of technology. During the pandemic, the wave of investment in innovation and entrepreneurship in the world and in Vietnam is still exploding.

To seize the opportunity to promote faster and stronger investment in technology, it is essential for Vietnam to soon complete the legal foundation to encourage investment, construction, and connect domestic with international resources, he said.