The Startup Ecosystem of Vietnam

First, Western countries have imposed tariffs on goods manufactured in China, while on the other hand, over the last few years, Free Trade Agreements were concluded between Vietnam and the EU, UK, and several countries in the Asia-Pacific region. Second, manufacturing costs have been rising in China. With the right initiatives, the Vietnamese ecosystem can benefit from these trends to become a true regional and global Hub. However, to achieve this goal, Vietnam will have to generate technology innovations and integrate them into the traditional manufacturing process, developing itself into an exporter of services and an exporter of manufactured goods.

The Vietnamese government has established a number of funds and initiatives at different levels to support startups and promote entrepreneurship. These include the SpeedUP fund started by Ho Chi Minh City’s Department of Science and Technology, the Startupcity.vn online platform, the Vietnam – Finland Innovation Partnership Program, the Saigon Silicon City Center, and the National Technology Innovation Fund (NATIF) under Vietnam’s Ministry of Science and Technology. Moreover, international organizations such USAID and CARE are contributing to the Vietnamese ecosystem through various initiatives and programs.

Vietnam’s VC investments are growing. To attract foreign investors or companies to Vietnam, the government offers tax incentives. Some key investors include Singaporean VC, Antler, and 500 startups. Furthermore, it is expected that VC funding can reach US$ 5 billion in the period of 2023-2025.

In 2016, Vietnam approved the Initiative for the startup ecosystem in Vietnam until 2025, more commonly known as National Program 844, to further promote the thriving startup ecosystems in the country. Since the beginning of the program, there has been strong growth both in the number of new startups and in their revenue.
In 2018, the government approved the Law on Supporting Small and Medium-Sized Enterprises to support start-ups through technology transfer, investments, training, and incentives for venture capital funds.

The main challenges the startup community in Vietnam faces are a shortage of qualified workers, a lack of critical mass of scaled startups, and slow regulatory reforms. In addition to existing funds and loans, the government needs to invest more in training and education to build a skilled workforce.

Vietnam should also continue with regulatory reforms to build a friendly business environment for investors and developers and continue attracting digital businesses to the country. The more Vietnam becomes an open society without Internet restrictions, the easier it will be for its startup ecosystem to thrive.

Growing industries that attract investors include ecommerce, fintech, foodtech, enterprise solutions, and information technology services. With unicorns such as MoMo and Sky Mavis, Vietnam is revealing itself to be a startup powerhouse in Southeast Asia.