Hot industries that attracted large amounts of capital last year were financial technology (Fintech), games, education, healthcare and e-commerce.
Fintech was the leading field in terms of total transaction volume and value, with 26.6% of total transactions in the fields of digital payment, personal finance, POS, and funding for SMEs, according to a report by Nextrans Vietnam on the startup market in 2021.
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In terms of transaction value, there were two deals worth more than 100 million USD. Specifically, in December, Momo raised $200 million from Mizuho, Ward Ferry, Goodwater Capital and Kora Management, with an estimated total value of up to $2 billion. VNLife – the company that owns the payment service VNPay – also announced successfully raising more than $250 million in a Series B funding round in July.
Edtech and e-commerce accounted for about 17-20% of the total deals in the Vietnamese startup market in 2021. In terms of value, e-commerce was the second attractive field. Tiki made the biggest contribution with a $258 million raised in Series E funding round led by AIA. Other big deals included Sky Mavis with $152 million, Equest with $100 million.
This shows that the Vietnamese startup market is also a favorite destination for venture capital funds.
Out of a total of 208 active venture capital funds, there are nearly 40 domestic investment funds. Big names and active funds in the market include VSV Capital – Nextrans, Vietnam Silicon Valley, Mekong Capital, 500 Start-up Vietnam, Vietnam Investment Group, IDG Ventures Vietnam, Do Ventures and Genesia Ventures.
According to Google’s statistics, five of the 10 most searched keywords on Google in Vietnam in 2021 were related to online teaching and learning tools. As a result, Edtech became an attractive “gold mine” in the eyes of investors.
Most of the investments in Vietnamese startups in 2021 were recorded in the Pre-seed and Seed rounds, accounting for 55.7% of the total deals in 2021. Vietnamese startup ecosystems also saw 4.1% of total Series C, D, and E deals such as Momo, Tiki, Homebase…
Vietnam has about 3,800 start-ups, with four unicorns (VNG, VNLife, MoMo, Sky Mavis) and 11 start-ups valued at over $100 million (Tiki, Topica Edtech…).
Nextrans Vietnam predicted a strong recovery in investment activity, and startups are expected to thrive after the Covid-19 pandemic.
In recent years, Vietnam has emerged as a startup hub in Southeast Asia, catching up with countries like Indonesia and Singapore. With a young population, high internet coverage and smartphone usage, and government support, Vietnam will continue to maintain its position as an attractive destination for investors.
The potential of start-ups, support from macro factors and attractive valuation make Vietnam an attractive investment destination. Many foreign investment funds have entered the market. So far, investment capital in technology start-ups in Vietnam still comes mainly from abroad.
Notably, a lot of potential Vietnamese start-ups are based overseas, such as in Singapore, where it is easy to raise capital and investors can easily divest to avoid risks. To deal with this problem, Vietnam needs to improve support mechanisms for the startup sector, such as open and easy administrative procedures and tax support for start-ups, besides having policies to support domestic investment funds and a sandbox mechanism to manage start-ups.
By Van Anh @ Vietnamnet