Investment for creative startups set to hit US$5 billion in 2023 – 2025

The information was released at the Vietnam Venture Summit 2022 held on December 19 in Hanoi.

According to Minister of Planning and Investment Nguyen Chi Dung, investment funds and innovative businesses will be important partners of the Government, ministries and sectors to support and contribute ideas for making investment startup-related policies, contributing to making Vietnam’s business environment more attractive in the region and the world at large. 

The ministry will be responsible for studying and reporting on the possibility of developing a law on venture investment, and proposing a mechanism to establish a support fund to effectively support potential innovative start-up projects, he said. 

The official suggested investment funds, enterprises, and startups accompany the ministry in the work, aiming to sketch out effective support mechanisms and mobilise resources for innovation activities in the country. 

Since 2019, the annual summit has served as a venue connecting international investment funds and Vietnam’s creative startup community.

In the previous forums, investment funds committed to invest in Vietnamese creative startups  with increasing committed capital, from US$425 million in 2019 to US$815 million in 2020. 

In the last two years, the investment capital in innovative start-ups reached nearly US$2 billion, showing that innovative startup activities in Vietnam are becoming more attractive to international and regional investors.

According to Minister Dung,  the nation attracted closed to US$500 million in the technological field in the first nine months of 2022. 

Vietnam has so far had 20 private innovative start-up investment funds established under Decree No. 38 in 2019 of the Government, with a total charter capital of more than VND100 billion VND (over US$4.2 million).

Support mechanisms and policies of the Government, ministries, sectors and localities have created the necessary premise for the strong development of innovation ecosystems in the country, Dung said. 

He, however, noted that it is necessary to soon form a substantive and effective innovative start-up investment environment, thus luring more investment from local and foreign investors.

In his opening remarks, Minister of Planning and Investment Nguyen Chi Dung said global investment trends are changing profoundly as a result of geopolitical uncertainties and a risk of recession in many big economies. The shift of capital flows has been taking place strongly among regions and countries, in which there are fewer investment opportunities for both startups and investors.

Vinnie Lauria, founder and managing partner of Golden Gate Ventures, said in the first decade of the startup ecosystem in Southeast Asia, Singapore and Indonesia were the leading growth drivers, with Singapore holding financial and human resources and Indonesia a giant domestic market.

In 2022, Vietnam has become the third pillar of this triangle, bringing about a perfect combination of leading technological talent, the entrepreneurial culture of Vietnam, and a fast-growing domestic market, he noted.

He added Vietnam is currently assessed as the latest gemstone of Southeast Asia, and its emergence comes as a result of its market’s attractiveness to investors and the Government’s support for the startup ecosystem.

Vietnamese startups raised a record of US$1.4 billion with 165 transactions in 2021, up 1.6 times from the US$894 million and 126 transactions in 2019. This indicated that transactions in the market have regained momentum after a pandemic-triggered decline. The upward trend is forecast to continue in 2023, according to the National Innovation Centre (NIC).

Some factors turning Vietnam into a bright spot of investment attraction include political stability, a young and educated workforce, developed infrastructure, digital skills, and innovation capacity.

Vietnam has become a leading candidate for the shift of capital flows, the NIC said, adding that the country is now at an important turning point of its economic development process. Its stature in the region, impacts of the COVID-19 pandemic, and the strong growth of investment funds have created a favourable context for Vietnam to hold an outstanding position.

At the summit, aside from panel discussions and seminars, a programme named Speed Matching was also held to connect startups with over 30 domestic and foreign investment funds.

The Vietnam Venture Summit is an annual event chaired by the Ministry of Planning and Investment and co-organised by the NIC and Golden Gate Ventures. It aims to connect the startup and innovation ecosystems in Southeast Asia with regional and international investment funds.