At Vietnam Venture Summit 2022, 39 investment funds committed to investing an amount of 1.5 billion USD in Vietnam’s innovative startups in the three years of 2023-2035. The total value of innovative startup investment in Vietnam in this period is expected to reach 5 billion USD.
According to Minister of Planning and Investment Nguyen Chi Dung, at the ventures in 2019 and 2020, investment funds have committed to invest in Vietnamese innovative startups with committed capital that increased gradually over the years. The fund went from 425 million USD in 2019 to 815 million USD in 2020.
According to the Vietnam National Innovation Center, Vietnamese startups have raised a record 1.4 billion USD across 165 deals in 2021, up 1.6 times from 894 million USD and 126 transactions in 2019. That shows that trading activity in the market has improved significantly, regaining momentum after the Covid-19 pandemic. This growth momentum will continue into 2023, with a projected GDP of 6.7% in 2023.
From 2020 to 2022, the investment capital in innovative startups has reached nearly 2 billion USD. Innovative startup activities in Vietnam are increasingly attracting the attention of international and regional investors.
Currently, Vietnam is assessed as Southeast Asia's newest gem. The rise of Vietnam is the result of the market's attractiveness to investors, in addition to the government’s support regarding the startup ecosystem.
In the first 6 months of 2022, the total number of successful deals in Vietnam accounted for 19% of the deals in Southeast Asia. Investment funds also act as incubators and accelerators for many startups. The funds have comprehensively supported startups in terms of financial support, knowledge, operational capacity, development, and commercialization of products contributing to creating outstanding values for Vietnamese startups when reaching out to the international market, helping Vietnam's innovative startup ecosystem become more vibrant and attractive.
Some factors that make Vietnam a bright spot for investment include political stability, a young and highly educated workforce, developed infrastructure, digital skills, the ability to create, etc.
Vietnam is at a crucial turning point in its economic development. The country's position in the region, the impacts of Covid-19, and the trend of investment funds to thrive have created a favorable context for Vietnam to occupy an outstanding position in the global macroeconomic picture.
According to an analysis by Crunchbase News, the total global venture capital in the third quarter of 2022 was 81 billion USD, down 90 billion USD (53%) over the previous year and down 40 billion (33%) quarter-on-quarter.
Southeast Asia's innovative startup investment market attracted 3.72 billion USD in the third quarter of 2022, down 36.4% year-on-year and 22% lower than in the second quarter of 2022.
Although the total investment value has decreased, the Southeast Asian market is still considered to be potential due to several key factors, such as the region's growth rate is expected to remain at 4-5%/year; the large market size of 680 million people; and with extensive internet coverage, the total value of goods of the digital economy is expected to reach 200 billion USD in 2022, 3 years earlier than previous predictions. Southeast Asia continues to see growth in the number of Internet users – with 20 million new users by 2022, bringing the total number of internet users to 460 million.
Many international investment funds rate Southeast Asia, and Vietnam in particular, as a potential destination for direct investment and venture capital flows.
According to the World Economic Outlook 2022 from the International Monetary Fund (IMF), openness to trade, higher education levels, increasingly skilled labor force, young population, and the combined high mobility of the regional supply chain has made Southeast Asia an attractive manufacturing hub in sectors as diverse as electronics, automotive, pharmaceuticals, and textiles, as well as a hotspot for digital innovation.
In addition, Southeast Asia has entered into many trade agreements, and all offer great opportunities to reach Asia, Europe, and North America. The Regional Comprehensive Economic Partnership (RCEP) coming into force, together with the recently signed ASEAN investment facilitation mechanisms and policies, is expected to help the FDI in the region to become more stable in the medium and long term.
Compiled by VietnamCredit