Elevating Startups to "Unicorns"

Emerging Technology and Innovation Hub

“In recent years, Vietnam has become a regional beacon of technology investment opportunities,” affirmed Vu Quoc Huy, Director of the Vietnam National Innovation Center (NIC), in his introduction to the Vietnam Innovation & Technology Report 2024 released at the Vietnam Innovation Forum 2024.

In the Global Innovation Index 2023 (GII 2023), Vietnam jumped two places to 46th out of 132 countries and economies listed. This advancement highlights Vietnam’s potential as an emerging innovation and technology hub, attracting attention and investment from around the world.

Prioritizing innovation and entrepreneurship, the Government has implemented a series of initiatives to create a favorable environment for technology companies, with the Vietnam Innovation Center (NIC), a dynamic support center for startups, playing a central role in this effort. Through the NIC, startups receive vital guidance from industry experts, access to potential investors and partnership opportunities to accelerate their growth.

According to the Vietnam Innovation & Technology Report 2024, in 2023, Vietnamese technology startups received a total investment of 529 million USD, down 17% compared to the previous year. This statistic shows the impact of challenging global economic conditions on business operations in general and Vietnamese technology startups in particular.

Despite a 17% decrease, Vietnam's VC funding (venture capital is financial capital provided to start-up, growth, high-risk, high-potential companies in the early stages) still demonstrated impressive resilience, standing out in the global context when total VC funding decreased by 35%.

In Southeast Asia, Vietnam retained its third place in terms of deal volume and regained its third place in terms of deal value, with Singapore leading both, closely followed by Indonesia. Healthcare and Education saw record high investment, with impressive increases of 391% and 107% respectively. In 2023, nearly 100 investors backed Vietnamese startups, with Singapore leading as the most active investor in Vietnam’s tech sector, closely followed by Vietnam in second place.

Illustrative photo. (Source: Investment Newspaper)

Mr. Kobe Ge, Director of China Capital Markets at the New York Stock Exchange (NYSE), said that international investors are increasingly interested in Vietnam thanks to its outstanding economic growth rate, potential young population structure and strong commitments from the Government in promoting innovation through long-term visionary policies.

However, while investment opportunities in Vietnam are abundant, it still lags behind more developed regions such as North America, which will account for nearly half of all private capital raised in 2023. “There is a clear gap in capital flows that can only be closed through strategic initiatives and more comprehensive support for private capital,” said Binh Tran, Vice President of the Vietnam Private Equity Investors Club (VPCA).

VPCA will launch in 2024 with activities to promote best practices in venture capital (VC) and private equity (PE) to accelerate capital output, industry talent, and value creation. By 2035, VPCA aims to channel $35 billion in private investment to drive business growth and economic expansion.

VPCA strives to create a comprehensive ecosystem that fosters progress and delivers tangible benefits for capital investment and business innovation. To achieve this, the agency will launch initiatives such as exclusive closed-door events, strategic summits and industry forums, all designed to engage key stakeholders and foster high-impact collaborations.

Building future “unicorns”

Founded in early 2019, Coolmate is the first Vietnamese startup to receive $3 billion in funding from GSR Ventures. GSR Ventures is a global venture capital firm with decades of experience helping early stage startups grow into unicorns (startups valued at over $1 billion). GSR Ventures is world-renowned for its unicorns including Advance Intelligence Group, Nium, Ele.me, and Xiaohongshu.

Coolmate has tripled its revenue in just one year of operation and aims to be an example of a sustainable business that can deliver real value to customers, employees, partners and shareholders. With support from GSR Ventures and Do Ventures, Coolmate accelerates its supply chain and uses the new capital in Vietnam’s rapidly expanding e-commerce sector to achieve its sales target and plans to IPO in 2025.

Coolmate is the first Vietnamese startup to receive $3 billion in funding from GSR Ventures. (Photo: Do ​​Ventures)

In 2022, financial services app MFast raised $2.5 million in a funding round led by Ascend Vietnam Ventures with participation from Wavemaker, Do Ventures & JAFCO Asia, bringing the total capital raised to $4 million. With this new capital, MFast is actively looking for talent in various fields including technology, marketing and sales, developing technology and data analytics systems that can generate consumer credit ratings, expanding MFast’s agent network and testing new business models. This new technology will increase automation in evaluating, underwriting and approving financial products for consumers. MFast also plans to expand to other Southeast Asian countries such as the Philippines and Thailand.

Also launched in 2019, Vuihoc is an online education platform that provides high-quality education at affordable prices for Vietnamese students. Online education platform startup Vuihoc is in the top 3 in the 2024 world Edtech “rising star” ranking conducted by Time magazine (USA) and market research firm Statista... It is also the only representative of Southeast Asia on this list.

In 2023, Vuihoc received a $6 million investment in a Series A round led by TNB Aura. With the investment, the startup has stepped up its AI technology to deliver personalized and optimized learning experiences to each student. The company will channel the new capital into growing its existing business to reach the milestone of 1 million paying users and continue to invest in technology to support adaptive learning, thereby increasing student engagement and learning effectiveness.

Vietnam is ranked 46th in the Innovation Index, TOP 7 globally 2023 in innovation for the middle-income group over the past decade; 46% year-on-year growth in the number of digital platform users; TOP 3 countries and economies with innovation performance for the 13th consecutive year and TOP 10 countries and economies leading in new mobile app downloads for 2 consecutive years.

Huy Anh (synthesis)