TECH STARTUPS IN VIETNAM

TECH STARTUPS IN VIETNAM

A STATISTA DOSSIERPLUS ON TECH STARTUPS IN VIETNAM

Table of contents 03 Tech unicorns leading the

01 Startup landscape domestic market

▪ Investment landscape ▪ Startups as market leaders
▪ Local-driven startup sectors ▪ Unicorns' profile
▪ Investor profile
04 Outlook: challenges and ambitions
02 Why Vietnam is Southeast Asia's next
▪ Challenges
startup hotspot ▪ Outlook

▪ Government supports and legal framework
▪ Economy-driven factors
▪ Digital evolution in consumer landscape

2

Vietnam: Southeast Asia's next startup hotspot?

Executive summary

Within a few years, Vietnam has seen the emergence of over 3,800 ▪ The thriving digital domestic market, with over 70 percent of its
startups and four tech unicorns that have attracted billions of U.S. population being online.
dollars in funding, raising the question of whether the country could be
the next startup hotspot in Southeast Asia. Many of these startups have While Vietnam can be proud of the achievements of its startup sector,
proven that they can not only provide internet users with their the country still has a long way to go and a lot to tackle in order to make

demanded digital products and services but can also become market itself truly a startup nation:
leaders in several categories. One can no longer look at the Vietnamese
internet landscape without the inclusion of the leading social messaging ▪ Vietnamese startups often face difficulty in attracting enough talent,
app, online payment service, or online blockchain game, all made by finding angel investors, and managing their funding and growth due
Vietnam’s most successful startups. Made-by-startup applications have to the new, rather inexperienced ecosystem.
made significant impacts on the Vietnamese digital economy, especially
in fintech, where financial services and technology are now much more ▪ Vietnam lacks up-to-date legal frameworks which are needed for the
inclusive for the population. development of tech products and startups, such as in the case of
fintech and blockchain. As a result, some of the most successful
Thus, Vietnam has stood out in the last couple of years as the next startups in the country have recently moved their holdings to
startup nation to watch due to the ongoing growth and potential of this Singapore, as the island nation provides access to more international
sector. This success can be attributed to recent economic investors, a well-established startup community, and clear-cut
developments, such as: regulations for the tech industry.

▪ Vietnam’s e-commerce market is set to grow threefold and become This report looks at how far Vietnam has come on its journey to
the second largest e-commerce market in Southeast Asia by 2025. becoming Southeast Asia’s next startup hotspot, focusing on its startup
landscape and the driving forces behind the growth of this sector.
▪ The 1.4 billion U.S. dollars of investment received by Vietnam’s tech Additionally, it identifies the challenges faced by Vietnamese ventures,
startups in 2021, a large proportion of which came from venture as well as provides an outlook for the future of made-in-Vietnam
capitalists from abroad. startups.

3

“ Without a clear legal framework, startups always live in fear while „
operating. They have to be on the defensive thinking about how to comply
with the law rather than spend that time on business and development.

-

Nguyen Thanh Trung

CEO of Sky Mavis

4

01 Startup landscape

▪ Investment landscape
▪ Local-driven startup sectors
▪ Investor profile

Vietnam’s startup sector is expanding rapidly

Figures show an increasing number of investments, deals, and deal values

Growth of investments in tech startups in Vietnam based on value and number of deals from 2013 to 2021 Vietnamese startups received a record-
breaking level of investment in 2021,
Investment value Number of deals valued at 1.4 billion U.S. dollars. In the
five-year period between 2016 and
Investment in million 2,000 165 200 Number of deals 2021, the number of investment deals
U.S. dollars 1,500 rose more than fivefold, from 31 deals
1,000 59 126 105 150 in 2016 to a total of 165 deals in 2021.
443 874 1,442
500 2018 2019 451 Additionally, bigger deals ranging from
0 2020 100 at least 10 million U.S. dollars started to
pick up in the last couple of years. In
9 21 42 31 30 50 2021, almost one billion U.S. dollars
20 46 45 105 48 were invested in deals valued at over 50
2015 0 million U.S. dollars, totaling a gross
2013 2014 2016 2017 2021 value larger than the total of all small

deals combined. These larger deals
Value of capital investments in tech startups in Vietnam from 2018 to 2021, by deal size were often made as later series funding
for more mature startups that had
0.5m or smaller Over 0.5m to 3m Over 3m to 10m Over 10m to 50m Over 50m already achieved certain milestones,
such as in the case of MoMo’s series E
Investment in million 7 29 11 145 251 301 386 12 40 65 108 226 960 and Sky Mavis’s series B (see pages 28
U.S. dollars 2018 13 62 112 2020 10 114 132 226 and 29).

2019 2021

(1) Note(s): Vietnam; 2015 to 2021 (2) Note(s): Vietnam; 2018 to 2021

Source(s): Cento Ventures; Do Ventures; Vietnam National Innovation Source(s): Cento Ventures; Do Ventures; Vietnam
National Innovation Center; ID 1338611
6 Center; ID 1315060

Local-driven innovations: magnets for venture capital

Online retail and digital payment categories are top receivers of venture capital

Value of capital invested in tech startups Leading startups based on funding value The Vietnamese market of online
in Vietnam in 2021, by segment (in million U.S. dollars) in Vietnam in 2021 (in million U.S. dollars) payment and online retail was, until
recently, either in a blue ocean or a
Investment value in million U.S. dollars Investment value in million U.S. dollars monopoly situation. But with the online
300 payments market receiving 450 million
Retail 469 MoMo U.S. dollars of investment in 2021
Payment 450 258 alone, startups are playing a significant
Entertainment/gaming 250 role in making e-commerce more
Financial services 175 152 accessible and inclusive for Vietnam’s
Education 100 digitally-savvy population.

Business automation 61
Multi-vertical In 2021, MoMo’s e-payment service, and
Healthcare 55 Tiki Tiki, an e-commerce marketplace
platform, bagged the biggest funding
Others 55 deals within the startup sector. Tech
Real estate and infrastructure products in these categories are in high
42 demand, such as MoMo’s e-wallet,
Entertainment/non-gaming which had 26 million downloads in H1
Logistics 37 VNLife 2021, making it the most popular app
of its kind that year (see page 28).
Communication and communities 33
Local services
Employment 29

10 Sky Mavis

8

7

4 EQuest

4

(1) Note(s): Vietnam; 2021 (2) Note(s): Vietnam; 2021
Source(s): VnExpress; ID 1290438
Source(s): Cento Ventures; Do Ventures; Vietnam National Innovation Center;

7 ID 1246483

Yet much of the funding comes from non-Vietnamese investors

Funds investing in tech startups Vietnam 2021, by origin

11 Over 170 funds were invested in tech
Japan startups in 2021, of which around 16
percent were local investors. The rest
13 34 came from markets with more
Other: Southeast Asia Singapore experienced venture capitalists,
including Singapore, the United
17 28 States, Korea, and Japan. For these
Korea Vietnam investors, Vietnam offers many
greenfield opportunities thanks to the
173 28 domestic consumer pool, in contrast
North America to the already well-developed markets
Total in most of the countries.

21 In the case of MoMo, for example, the
Other: excluding Asia company operates purely in Vietnam,
yet it has been financially backed by
21 well-known American private equity
Other: Asia, firms such as Goldman Sachs and
excluding Southeast Asia Warburg Pincus throughout its
development.

8 Note(s): Vietnam; 2021 Source(s): Crunchbase; Nikkei Asia; Reuters

Source(s): Cento Ventures; Do Ventures; Vietnam National Innovation Center; ID 1304660

02 Why Vietnam is Southeast Asia’s next

startup hotspot

▪ Government supports and legal framework
▪ Economy-driven factors
▪ Digital evolution in consumer landscape

Vietnam aspires to be more startup-friendly

Less time and fewer procedures are needed to start a business in Vietnam compared to many Asian countries

Time required to start a business in the Asia- Number of startup procedures needed to Compared to Asia’s startup hubs, Vietnam still
Pacific region in 2020, by country or region (in register a business in the Asia-Pacific region in has a lot to do to support entrepreneurs. In
2020, it took a startup at least 16 days and
days) 2019, by country or region eight procedures on average to legally start a
business in the country, putting Vietnam in
Time in days Number of startup procedures the middle range on the ease of starting a
13 new business in Asia. However, the country
Laos 173 Philippines has been making a lot of progress since then,
Indonesia 11 from allowing 100 percent foreign ownership
Cambodia 99 10 of enterprises to providing special tax
India 9 treatments that exempt a significant share of
Philippines 33 Laos 9 taxes for new businesses.
Bangladesh 9
Nepal 22.5 Cambodia 8 Embracing the goal of making the country a
Mongolia 8 “startup nation,” Vietnamese policymakers
Bangladesh 19.5 Bhutan 8 have been aiding the startup community with
Vietnam 8 additional funding, establishing supporting
India 17.47 Nepal 8 organizations such as the National Innovation
Japan 8 Center, as well as building the tech startup

Malaysia 17 Malaysia 7 incubator of Sai Gon Silicon City in recent
Sri Lanka 6 years.
Pakistan 16.5 Timor-Leste 6
Myanmar Source(s): Vietcetera; Vietnam Investment Review; VnExpress
Vietnam 16

Timor-Leste 13

Indonesia 12.64

Bhutan 12

Mongolia 12.00

Maldives 12

Japan 11.15

10 (1) Note(s): Asia, APAC; 2020 (2) Note(s): Asia, APAC; 2019
Source(s): World Bank; ID 1119061
Source(s): World Bank; ID 731104

Vietnam’s economic growth comes with a booming domestic market

GDP per capita, PPP Vietnam from 1990 to 2020

GDP PPP in current international U.S. dollars* 8,650.13 Within 30 years, the country has seen
8,381.24 remarkable development in its
7,768.08 population’s purchasing power. From
7,155.44 having a GDP per capita in purchasing

6,572.98 power parity of under 1,000 U.S.
6,102.64 dollars in the early 1990s, a
5,745.21 Vietnamese person today enjoys a
5,358.95 GDP per capita of almost 9,000 U.S.
5,042.48 dollars on average, outpacing the
4,523.25 income development of many
4,213.30 developed nations.

2,960.64 Economic growth comes hand in hand
with greater technology adoption (as
1,987.30 shown on page 15) among the
Vietnamese. Digital products have
917.09 slowly transitioned from being used
exclusively for work or entertainment
1990 2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 by a niche group of people into a
must-have in the daily life of the
Note(s): *an artificial currency, used to describe what an international dollar would buy in a country in comparison to the amount of goods and general population.

11 services a U.S. dollars would buy in the United States, as of May 2022; Vietnam; 1990 to 2020 Source(s): Forbes

Source(s): World Bank; ID 1310418

The fast-growing internet economy has not shown any sign of
slowing down

Annual gross merchandise volume (GMV) of the Retail e-commerce market volume in Southeast The annual gross merchandising value
internet economy in Vietnam from 2015 to 2021, Asia from 2019 to 2021, with a forecast for 2025, (GMV) of Vietnam's e-commerce
market was 21 billion U.S. dollars in
with a forecast for 2025 (in billion U.S. dollars) by country (in billion U.S. dollars) 2021 and is set to more than double
by 2025. To keep up with this

57 Spending in billion U.S. dollars development, improving online retail
and other supporting technologies has
53 104 become the priority among
35 businesses. As such, retail e-
Internet economy value in billion U.S. dollars Indonesia commerce startups received over 469
million U.S. dollars of investment in
21 2021 (as shown on page 7), so it is
likely that Vietnam's retail e-commerce
39 sector will continue to grow.
Vietnam 8 13 Compared to the rest of Southeast
Asia, Vietnam's retail e-commerce
5 sector is forecast to reach the second-
highest market volume by 2025.
Thailand 35
21
12
5

21 Philippines 26 2025*
16 Malaysia 12 2021
12 5 2020
Singapore 3 2019
3
19
2015 2019 2020 2021 2025* 14
8
3
9.8
7.1
4.9

1.9

12 (1) Note(s): Vietnam; 2015 to 2021; *forecast (2) Note(s): Asia; 2019 to 2021; excluding online media and travel sales; *forecast
Source(s): Bain & Company; Google; Temasek Holdings; ID 647645
Source(s): Bain & Company; Google; Temasek Holdings; ID 1193113

FDI and remittances are empowering the Vietnamese tech sectors

Value in billion U.S. dollars Value of remittances received in Vietnam from 2000 to 2020 (in billion U.S. dollars) As the backbone of innovation, the
technology and telecommunication sector
13.0 14.0 15.0 16.0 17.0 17.2 has been developing fast to accommodate
the ongoing digital transformation of
10.0 11.0 12.0 businesses and consumers’ daily lives.
Many developments within the sector are
8.3 8.6 fueled by investments from abroad,
including foreign direct investments (FDI)
3.2 and indirect investments from remittances.
1.3
In 2019, foreign investment seemed to
2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 peak at 3.5 billion U.S. dollars, with a
significant drop to 1.4 billion U.S. dollars in
Total foreign investment capital in the IT, electronics, and telecommunications industry in Vietnam 2020 during the COVID-19 pandemic.
from 2018 to 2020 (in million U.S. dollars) However, as some overseas-educated
Vietnamese are now taking leadership roles
3,566.25 and contributing to the success of
Foreign invetment Vietnamese startups, it may be that the
capital in million U.S. 591.77 1,498.30 level of investment seen in 2019 will return,
2018 2020 driven by the international experience and
dollars expertise of this group of business leaders.

2019

13 (1) Note(s): Vietnam; 2000 to 2020; in current U.S. dollars (2) Note(s): Vietnam; 2018 to 2020 Source(s): Business Times Singapore; Tech Collective SEA
Source(s): Ministry of Information and Communications (Vietnam); MPI; ID 1291774
Source(s): World Bank; ID 880787

Vietnam's tech sector and IT workforce have benefited each other

Average monthly salary for paid workers and employees in Number of employees in the IT, electronics, Known for having a young, relatively
Vietnam in 2020, by industry (in million Vietnamese dong) and telecommunications industry in affordable workforce, Vietnam has also
been focusing on growing its skilled
Activities of extraterritorial organizations and bodies 12.16 Vietnam from 2016 to 2020 (in millions) labor force with specialized know-how
Financial, banking, and insurance activities 9.61 for various industries, including the
Information and communication 9.54 1.08 technology and telecommunication
Real estate activities 9.07 1.01 sector.
8.89 0.97
Professional, scientific, and technical activities 8.37 0.92 The number of employees working in
Electricity, gas, steam, and air conditioning supply 8.18 0.78 this sector has increased gradually
7.78 every year, reaching over one million in
Mining and quarrying 7.4 2016 2017 2018 2019 2020 2020 as digitalization has become the
Transportation and storage 7.05 norm for many businesses. At the
Human health and social work activities 6.96 same time, the IT sector recorded an
6.94 average salary of 9.5 million
Education and training 6.72 Vietnamese dong, the third-highest
Administrative and support service activities 6.7 average salary among all industries,
Activities of Communist Party and other government services 6.42 making it an attractive career path for
many young Vietnamese. However,
Wholesale and retail trade; vehicle repair Vietnam also faces some issues with
Manufacturing building a sustainable IT workforce
(see page 33).

Water supply, sewerage, waste management
Sector
Number of employees in millions

14 (1) Note(s): Vietnam; 2020; 15 years and older (2) Note(s): Vietnam; 2016 to 2020 Source(s): The Hong Kong Trade Development Council (HKTDC)

Source(s): General Statistics Office of Vietnam; ID 1302370 Source(s): Ministry of Information and Communications (Vietnam); ID 1291803

Vietnamese consumers of today are digitally connected and
cannot live without their devices

Internet, social media, and smartphone penetration forecast in Vietnam, from 2010 to 2025

Internet Social media Smartphone Vietnamese consumers are not exempt from
the influence of the Internet of Things on the
Penetration rate in percent 80% consumer landscape globally. Today, the
70% internet is simply a part of life in Vietnam. In
60% the early 2000s, less than one percent of
50% Vietnamese used the internet. However, this
40% changed quickly just a few years later when
30% the internet penetration rate in the country
20% started to increase rapidly. Today, around
10% over 70 percent of the population is online
and on social media, and most of them own
0% at least a smartphone.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021* 2022* 2023* 2024* 2025*
Together, the usage of the internet, social
media, and smartphones have blended
seamlessly into the daily life of most
Vietnamese. This comes with the demand

for a whole new kind of products and
services for the new generation of digitally
connected citizens.

Note(s): Vietnam; 2010 to 2019; all values are estimates; *forecast

15 Source(s): Statista; ID 1314417

E-commerce has gone mainstream

Number of online shoppers and average revenue per online Growth of e-commerce expenditure on consumer As of 2021, around 54.6 million people
shopper in Vietnam from 2017 to 2021 goods among internet users in Vietnam in 2021 living in Vietnam, equaling over half of
compared to 2020, by category the country’s population, have purchased
goods online. Not only are there more
Number of users Average revenue per user Food Growth rate 86.3% Vietnamese consumers who shop online,
60 300 but they have been spending more in
general on e-commerce purchases. The
Number of users in millions average revenue per e-commerce user in
Average revenue per user in U.S. dollars Vietnam went from under 200 U.S.
50 240 251 250 Beverages 50.7% dollars in 2017 to 251 U.S. dollars in
225 54.6 Toys, hobby, DIY 43.7% 2021.
202 44.8 49.3 39.4%
40 186 200 Fashion 29.7% This spending growth could be seen
39.9 Electronics 29.2% across various product categories, from
Personal & household care small everyday goods like food to big-
30 33.6 150 ticket items such as furniture.
Correspondingly, online retail
20 100 technologies and related tech support for
e-commerce platforms have been in high
10 50 Furniture 28.5% demand.

0 0 Physical media 13.8%

2017 2018 2019 2020 2021

(1) Note(s): Vietnam; 2017 to 2021; figures are estimates (2) Note(s): Vietnam; 2021

16 Source(s): iDea; Ministry of Industry and Trade (Vietnam); ID 1338678 Source(s): DataReportal; Kepios; Statista Digital Market Outlook; We Are Social;
ID 1112153

Cashless payments on the rise

Transaction value of digital payments in Southeast Asia in 2022, by country and segment (in billion U.S. dollars) Once a heavily cash-reliant country, Vietnam
has seen a lot of progress in the development
Mobile POS payments Digital commerce and usage of cashless payment methods in the
last couple of years. The country recorded one
67.8 of the highest adoption rates for these
payment methods and the fourth largest
29.6 25.1 amount of transaction value of digital payment
in Southeast Asia.
16.8 15.3 11.4
Cash on delivery (COD), which used to be the
4.2 0.7 3.5 2.5 2.9 6.0 0.2 3.7 2.7 1.4 0.5 0.7 0.2 0.1 go-to method for online shoppers, has steadily
lost its popularity to other online payment
Indonesia Philippines Malaysia Myanmar Laos Timor-Leste formats, including online banking and e-wallets.
Brunei Bank transfer is forecast to surpass COD as the
Thailand Vietnam Singapore Cambodia most popular payment method for e-commerce
purchases in 2022, while e-wallets will continue
Breakdown of e-commerce revenue in Vietnam from 2017 to 2025, by payment method to grow in usage in the coming years. Besides
online shopping purchases, digital payment

Bank transfer Cash on delivery Cards E-wallet Other Direct debits formats have also become popular for money
transfers, bill settlements, and more.
Revenue share 40%
30%
20% 2018 2019 2020 2021 2022* 2023* 2024* 2025*
10%

0%
2017

(1) Note(s): Asia (2) Note(s): Vietnam; *forecast Source(s): VISA Inc., YCP Solidiance

17 Source(s): Statista; Statista Digital Market Outlook; ID 1306238 Source(s): Statista; Statista Digital Market Outlook; ID 1311563

Increased demand drives fintech growth

Number of fintech deals by category and number of e-wallet apps in Vietnam

Total funding value of fintech deals in Vietnam from 2016 to 2021, by category (in million U.S. dollars) Meanwhile, together with the increase in
demand and usage, the number of online
Alternative Blockchain in Cryptocurrencies InsurTech Investment Payments payment service providers introduced in
lending financial tech Vietnam has been increasing fast. For
services instance, online banking is now the norm
for all traditional banks, and so is QR
2021 4.92 7.4 11.25 1.5 - 350 payment in most retail shops. At the
2020 same time, e-wallet payment seems to be
2019 0 0 0 0 0 0 one of the busiest categories to watch in
2018 the Vietnamese fintech sector.
2017 0.5 2.2 0 0 1 403
2016 While there were only five e-wallet

3 0 0 0 0 0 providers in the country in 2015, by 2020,
the number of e-wallet brands had grown
0 0 0 0 0 3.32 to nearly 40. Not surprisingly, a lot of
investments have been made into
0 0 0 0 0 28.8 bettering online payment systems in
Vietnam. In fact, digital payment has
Number of e-wallet apps in Vietnam from October 2015 to August 2020 been the most well-funded category
among fintech startups in the country.
5 21 37
October 2015 2017 August 2020 Source(s): OpenGov Asia

(1) Note(s): Vietnam; 2016 to 2021; excluding deals with undisclosed amounts (2) Note(s): Vietnam
Source(s): Decision Lab; iDauTu.com; ID 1271902
18 Source(s): PwC; Singapore FinTech Association; United Overseas Bank; ID 1227520

Cryptocurrency is the new investment trend in Vietnam

Number of cryptocurrency users in Vietnam from 2017 to 2026 Breakdown of fintech firms in Vietnam in the first nine months of Vietnam was the country where
(in millions) 2021, by category cryptocurrency was most heavily
used globally in 2021, and the
8 7.46 Share of fintech firms number of cryptocurrency users
7.28 0% 5% 10% 15% 20% 25% has kept rising exponentially in
the past few years. While
6.93Number of users in millions Payments 21% remittances were the main
7 Investment tech 20% reason behind the adoption of
Cryptocurrencies 19% cryptocurrency, specifically
6.32 Alternative lending 17% Bitcoin, among early Vietnamese
Finance and accounting tech users, these digital assets are
6 7% now often seen as a form of
5.39 Banking tech 6% investment.

Insurtech 5%
5 2% As the market for digital coins
4.22 Blockchain* 2% expanded, blockchain startups
RegTech started to emerge in Vietnam. In
4 2021, cryptocurrency firms
accounted for almost one-fifth of
3.04 the total number of Vietnam-
3 based fintech companies.

2.05 (2) Note(s): *blockchain in financial services only, Vietnam; 9M 2021 Source(s): Chainalysis
2
Source(s): PwC; Singapore FinTech Association; Tracxn Technologies; United
1.32 Overseas Bank; ID 1286711
1 0.84

0
'17 '18 '19 '20 '21 '22 '23 '24 '25 '26

(1) Note(s): Vietnam

19 Source(s): Statista; Statista Digital Market Outlook; ID 1311576

Online entertainment is the new normal for many

Video games market revenue in Vietnam from 2017 to 2026

Revenue in million U.S. dollars 516 From streaming the latest television
471 shows to competing with friends in an
429 e-sports tournament, there are a
382 number of things to do online. Among

332 them, online gaming is a favorite
280 activity of many internet users in
231 Vietnam, and the market for online
games has been seeing constant
165 growth in revenue in recent years. This
131 also promotes the release of new
105 video games and the establishment of
new video game publishers, including
startups.

2017 2018 2019 2020 2021 2022* 2023* 2024* 2025* 2026*

20 Note(s): Vietnam; 2017 to 2026; *forecast

Source(s): Statista; Statista Digital Market Outlook; ID 1283309