Since 2017, Vietnam has emerged as a hub for tech start-up thanks to its abundance of IT talents & IT Software Development companies. Even though the capital poured into the tech sector decreased by 22% in the first half of 2020, the country was still the most promising investment destination for the next 12 months.
Do Ventures - a risking investment fund has just released a potential report about the technology start-ups in Vietnam.
a. Investment flow in tech start-up
Followed by the data report, 2019 is a successful year of Vietnamese technology start-ups, who successfully called 861 million USD (increased by 92% compared to the capital value of a year before). The successful cases are 123 - which doubled the number of cases in 2018. The companies that successfully called for their capital mostly are famous companies, such as Tiki, VNPay and Sendo.
However, in the first half of 2020, the capital value that was poured into the Vietnamese technology start-ups decreased by 22% in that same time in 2019.
Investment capital flows in technology start-ups before and after the COVID-19
Vietnam market has witnessed 7 transactions with a value exceeding 50 million USD for each (the total value is 692 million USD) as shown in the figure below:
Successful call-for-capital cases in 2019 by sector are described as below:
- 300 million USD was poured into payment;
- 196 million USD in retail;
- 58 million USD in logistics;
- 40 million USD in finance service;
- 60 million USD in business transformation service.
Meanwhile, the number of transactions under 5-million USD in the early-stage of 2019 was 98, nearly the double of 2018 value.
The report shows that there was a steady increase of divestment cases in 2019 (15 cases). However, there was also a lack of sold-out transactions (like the Yeah1 IPO case in 2018). The number of secondary transactions decreased sharply in the first half of 2020, while that of average transactions showed a contrast.
In the first half of 2020, due to the COVID-19 crisis, the amount of capital that was poured into the Vietnamese technology start-ups just reached 222 million USD. It decreased by 22% compared to last year. The breakdown is unavoidable because of the social distance and the unsustainability of World Finance.
c. Investment opportunity
The report reveals the attention of Venture Capital investors in and out of the nation about the start-up ecosystem in Vietnam is still at a high point. 50 large investment funds in the region choose Vietnam as the most promising destination for investment in the next 12 months. All of the surveyed funds respond that they are finding ways to invest in 117 to 120 cases in the next 12 months. Nearly 80% of the funds have been planning for 1 to 5 cases of their own.
In 2021, the investors will focus on 3 main fields in Vietnam: Education, Healthcare and Finance Service, as a result of the shift in consuming behavior during and post COVID-19 period.
Investment fund in Vietnamese start-up, defined by nation
d. Cooperating with professional Software development company
One of major challenges in the startup community is the lack of talented workforce and tech expertise. That’s why many young entrepreneurs are cooperating with leading IT Software development companies in order to gain efficiency and effectiveness. Their ideas may be great and very promising, but how to quickly develop a prototype to test the market? How to build a MVP (minimum viable product) in a short time with enough features to attract early adopters customers?
That’s where Software development experts can come to help. They understand that many startups don’t have enough tech knowledge and want to dedicate more time on the business plan. With their expertise in the industry, they can advise on the technology used, rapidly develop a product architecture & design, and start working on the materialization of ideas.
NTQ has been working with many startups during the last few years. Our software development company highly appreciates the innovative, entrepreneurial spirit and the passion for creating new value. Just like other incubators, we always desire to nurture new ideas and help turn them into reality. Why not contact us and explore how we have guided other entrepreneurs to success?
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