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2019 - an increase in investments in Vietnamese startups

During the first half of 2019 Southeast Asian startups have enjoyed investments amounting to a total of about 5.9 billion USD. Vietnam got around 17% of this amount, which represents an increase of 5% compared to the same period in 2018, nonetheless the country has not yet become a leader in the region, as it stays behind Indonesia and Singapore that respectively got 48% and 25% of the total amount of investments in startups in Southeast Asia up until the end of June 2019. As a matter of fact, investments in Vietnamese startups truly started to become apparent in 2018, with the first large capital injections in online retail, payments and education sectors.

This is what we learn from a recently published joint research conducted by ESP Capital (Vietnam) and Cento Ventures (Singapore) entitled "Vietnam Tech Investment Report H1 2019". The conclusion is that the Vietnamese startup sector has experienced a rapid growth during the first half of this year and it is clearly getting closer to the two regional leaders: Indonesia and Singapore.

The fact is that from the 1st of January 2019 until the 30th of June 2019 investments in Vietnamese startups reached a decent amount of 246 million USD on 56 deals. It is expected that investments will reach an impressive amount of 800 million USD by the end of this year, that would become an increase of 80% compared to last year's total 444 million USD.

In a nutshell, the most invested Vietnamese startups are located in the digital sector. Indeed last year the American private equity company Warburg Pincus poured 100 million USD into the e-payment app Momo, which at the time was one of the largest amount of funds ever raised by a Vietnamese startup. This year in March, Northstar Group, a private equity company from Singapore injected 75 million USD into Tiki, a Vietnamese e-commerce platform, however this amount has not yet been confirmed. More of that VNPay, a payment solution company obtained 50 million USD from GIC, and VNG, a gaming company, received 29 million USD from Temasek Holdings; it should be noticed that both of those investors are also from Singapore.

Startups of a humbler size are also being established and receiving investments. For example according to Crunchbase, a startup database, Luxstay, startup proposing accommodation similar to Airbnb, received 4.5 million USD in May and the sales software KiotViet received 6 million USD in August.

The conclusion of those observations is that Vietnamese startups are vivid and are growing rapidly. The development of the Vietnamese startup sector, up to this point, is in line with Resolution No. 50-NQ/TW of the Central Committee of the Communist Party of Vietnam, which aims and increasing and improving the quality and innovation of foreign investments in Vietnam. It is sure that in a short and a medium perspectives the Vietnamese startup sector will continue to grow significantly, and will participate to achievement of the objectives stated in Resolution No. 50-NQ/TW.