New technology shaping development of local startups

Vietnam holds advantages in terms of new technologies such as blockchain, AI, Metaverse, healthtech, fintech, and edtech.

Total venture capital going to Vietnamese startups reached a record high in 2021 of $1.3 billion. According to the “Vietnam’s Ecosystem for Technology Startups” report released by the Asian Development Bank (ADB) in July, the next tech unicorns in the Asia-Pacific could come from Vietnam. The report showed that, in 2021, the five sectors attracting the most capital were fintech, with 26.6 per cent, e-commerce 20.3 per cent, edtech 17.2 per cent, healthtech 7.8 per cent, and software services 6.3 per cent.

Mr. Pham Hong Quat, Director of the Department of Market Development and Science and Technology Enterprises at the Ministry of Science and Technology, said Vietnam has about 3,800 startups, of which eleven are valued at over $100 million. More than 200 investment funds and 100 business promotion organizations and incubators are now operating in Vietnam. The country’s ecosystem ranks third in ASEAN, after Singapore and Indonesia. It currently has four unicorns with valuations of over $1 billion: VNG, VNPay, MoMo, and Sky Mavis.

According to HSBC, Vietnam has emerged as a startup hub and is close to catching up with countries like Indonesia and Singapore. With a young, dynamic, and educated population, high internet coverage and smartphone usage, and preferential policies from the government, it is forecasted to maintain its position as an attractive destination for both investors and technology companies, becoming a cradle for “potential unicorns”.

Analysts have said that Vietnam’s young, dynamic, and tech-loving population gives it an advantage in terms of new technologies, and policymakers have introduced a wide range of support to innovative startups.

Such factors give Vietnam many opportunities to become a development hub for unicorns, domestic and foreign organizations believe.