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Vietnam may be top 3rd SEA start-up ecosystem

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A package to be delivered by Tiki.vn, a popular online retail platform in Vietnam. Photo supplied

Vietnam may be top 3rd SEA start-up ecosystem

Vietnam will emerge as the third largest start-up ecosystem in Southeast Asia (SEA) next year, according to The Southeast Asia Ecosystem 2.0, a new report by venture capital (VC) firm Golden Gate Ventures.

“It has already solidified its growing prominence, and we expect to see stronger signs of SEA-focused VC funds putting more effort into early stage investments in Vietnam,” said the report.

In 2022, the number of SEA-focused VC funds will put more effort into early stage investments in the country, and it will continue to grow in the next 10 years.

These five industries in Vietnam, which are expected to grow, include e-commerce, financial services, online media, online travel and food and transport.

More start-ups in Southeast Asia are expected to go public, with the annual number of initial public offerings (IPOs) in the region expected to cross 300 by 2030, said the report.

This would be almost three times the number of regional firms that went public last year.

Golden Gate Ventures anticipates that funding for the entertainment and media sector will grow substantially over the decade.

The sector recorded about $100 million in funding last year, but this is likely to rise as entertainment and media start-ups focusing on Asian content are gaining a global following, the report noted.

The report also outlined several trends seen in Southeast Asia over the past few years.

Since 2015, a new generation of entrepreneurs has emerged, catalysed by mega rounds of fundraising by fast-growing start-ups such as Grab and Gojek.

Former senior employees of high-growth companies have gone on to start their own enterprises, starting a new chain of entrepreneurship.

More corporate VCs have also emerged in the past decade, the report said. There were around 60 corporate VCs in the region last year, compared with just seven a decade ago. Such firms are increasingly leading funding rounds, especially at the seed and Series A stages.

The report also pointed to the efforts of the Vietnamese government in supporting the development of the nation’s start-up ecosystem.

Regarding policy incentives for start-ups, the government exempts corporate tax for four years and reduce it by 50 per cent for the next nine years.

In addition, start-ups can use government-owned research and development facilities and incubation facilities free-of-charge.

The MST SpeedUp programme organised by the Department of Science and Technology of Ho Chi Minh City spent $1.4 million to commit to supporting 50 start-ups in the 2017-2019 period.

As for investors, in 2018, the government officially legalised start-up investment activities in Vietnam through the issuance of Decree 38/2018/ND-CP and Decree 31/2021/ND/CP, thereby simplifying investment procedures for both domestic and foreign investors.



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