Published April 20, 2022

Vietnam Innovation and Tech Investment Report FY2021 out now

Do Ventures

Vietnam Innovation and Tech Investment Report FY2021 out now

Read the full report HERE.

While posing a tough challenge to the economy, the Covid-19 pandemic has been serving as a good catalyst for digital transformation in the past year. After one year of slowdown, Vietnam's startup scene has rebounded and reached new heights. This report, co-authored by NIC and Do Ventures, paints a broad picture of Vietnam’s venture capital in 2021 and provides a snapshot of the country's innovation and startup ecosystem with the following key findings: 

A record year for Vietnam venture capital

Venture capital going into Vietnamese startups reached a record high in 2021 amidst market uncertainties and upheaval caused by Covid-19. The total funding amount reached a new high of $1.4B, a 1.5x growth compared to the prior record of $874M set in 2019. Investor appetite has been accelerated by an increased interest in sectors that have benefited from the global pandemic. Moreover, the ease of video conferencing has made travel restrictions no longer a barrier to the investment decision-making process.

Vietnam is now home to 4 unicorns

Riding the acceleration of digital adoption, Vietnam celebrated the emergence of two unicorns, MoMo and Sky Mavis, in 2021. Their success doubles down on the country's growing status as a rising tech hub in the region. The future looks promising for the Vietnam tech scene as a dozen of companies with valuations of over a few hundred million dollars are in the wings to become unicorns in the coming years.

Investor confidence in Vietnam's startup scene remains high

The total number of funds investing in Vietnamese startups climbed by 60%, equally distributed among countries. Singapore was the most active investor in 2021, followed by Vietnam and the U.S. Japanese investors have gradually resumed their activities in Vietnam after a two-year slowdown.

A strong upswing across sectors

While payment and retail remained dominant in attracting venture financing, gaming rose to become the third most funded sector, thanks to the worldwide success of Sky Mavis and its phenomenal child • Axie Infinity. Besides, the pandemic has proven to be a boom for some sectors as they continued to ride investors' interest and enjoyed customers' support. The most fruitful ones included Healthcare, Education, and Business Automation with a Y-o-Y growth of 1,016%, 562%, and 205% respectively.

Later-stage deals returned

The total amount of $10M+ deals exceeded $1B, a 255% increase over the previous year, spreading over 17 deals. While Seed funding soared to a new high in both deal count and deal value, later-stage funding has returned to the pre-Covid level with five mega deals made in payment, retail, and gaming. Given a solid pipeline of early-stage companies and the positive environment created by the Vietnamese government, Vietnam's startup ecosystem is poised to enter a more mature stage.

As an agency that supports and nurtures the innovation ecosystem, Mr. Vu Quoc Huy, Director of the Vietnam National Innovation Center (NIC) said: "NIC will continue to research and propose advanced mechanisms and sandboxes to promote innovation activities nationwide. With the progress we have made in 2021, I believe that 2022 will be the pivotal year for Vietnam's ecosystem to have breakthrough developments, with numerous prospects for the digital economy's next stage of growth."

Sharing her comments on the report, Vy Le, General Partner of Do Ventures, said: "Our innovation ecosystem has achieved meaningful strides in 2021 thanks to the resilience of startups as well as the timely support from the Government. We believe that Vietnamese entrepreneurs will continue to thrive, transforming Vietnam into a regional technology hub.”