.svg){kind=spacer}
Understanding Vietnam's startup incubation policies and ecosystem
In October 2023, the K-Startup Center Hanoi opened in Hanoi, Vietnam. At the same time, the 'Korea-Vietnam Startup Support Council' was established, and we'd like to find out why Vietnam is so actively involved in creating a foundation for Korean startups to enter the country.
1.Vietnam's Industry Status
Vietnam has been actively attracting FDI(foreign direct investment) since 1986, starting with the Đổi Mới policy(Chính sách Đổi Mới, "Reform and Opening-up Policy") and the Vietnam Foreign Investment Law in 1987.
FDI has continued to increase, surging from $2 million in 1988 to $52.4 billion today.
South Korea, Singapore, and Japan are the top three sources of FDI, with South Korea taking the top spot.
The growth of FDI industries has driven economic growth and boosted exports, but there is a need to reverse the problem of increasing dependence while not internalizing in-house technology.
2.Vietnam's Digital Transformation and Startup Fostering Policy
In June 2020, Vietnam announced the 'Digital Transformation Programme for 2025 to 2030'.
Goal 1) Drive the development of 'digital government, digital economy, and digital society'
Goal 2) Foster Vietnamese digital technology companies capable of going global
In addition, a policy to establish the National Innovation Center (NIC) and facilitate a national innovation startup ecosystem by 2025 (May 2016) was issued.
This includes supporting innovative startups, promoting venture capital investment by corporations, mergers and acquisitions of startups, and actively supporting the environment for domestic companies to go abroad, etc.
3.National Program 844
A national program(Đề án 844) to assist the startup ecosystem implemented by the Ministry of Science and Technology (MOST) since 2016.
That program intends to expand the startup market, develop policies through support for incubation centers, nationwide accelerator programs, legal, financial, etc.
*Government organizations that aid startups
-National Technology Innovation Fund (NATIF): R&D funding loans, technology transfer support
-National Agency for Technology Entrepreneurship and Commercialization Development (NATECD): Startup ecosystem incubation, technology market development
-National Innovation Startup Portal (NISP): an information service platform for startup-related policies, laws, investments, support, etc.
-National Startup Support Center (NSSC): building a network of domestic and international startup investors, investment connections, etc.
✔️ As a policy to reduce its dependence on FDI, Vietnam has actively fostered startups under the government's leadership, and as VC investments have become more vibrant, the number of private-led startups has continued to grow.
✔️ In line with the government's digital transformation, the growth of IT and digital technology-based startups has been prominent.The growth of startups based on these technologies has become noticeable due to the government's proactive efforts to stimulate startups and digital transformation.
4.Current status of startups in Vietnam
Over 3,200 startups have been established in Vietnam within 23 years.
*Vietnamese unicorn startups
-VNG: Vietnam's first unicorn / online gaming, messenger, payment platform business, etc.
-VNPAY: Fintech (payment solution)
-Sky Mavis: Blockchain-based game developer
-MoMo: e-wallet service (digital payment and remittance)
-Tiki: E-commerce
-Sendo: E-commerce
✔️ Total of 6 which means that Vietnam is the 3rd country with the most Unicorns after Singapore and Indonesia.
5.Status of startup investment in Vietnam
*Changes in annual investment volume and number
-2018: $443 million / 59 deals
-2019: $874 million / 126 deals
-2020 $451 million / 105 cases
-2021 $144.2 million / 165 deals
-2022 $6.35 million / 134 cases
-As of September 2023, $427 million / 56 cases
✔️ Sharp increase in 2021, then decline / expected 2023 to be less than 2022
*Number of deals by investment size ('22)
-102 Pre-A
-21 Series A
-6 Series B
-5 Series C
*Size of investment by major sector
-2022: Financial services (34%), retail (32%), healthcare (6%)
-2021: Retail (33%), Payment Services (31%), Gaming/Entertainment (12%)
6.Major Programs & Events for Startups in Vietnam
-TECHFEST: Innovative startup networking event organized by the Ministry of Science and Technology of Vietnam
-Vietnam Venture Summit: Connecting with global investors
-Festival KHOi NGHIEP: Providing entrepreneurship education for university students and budding entrepreneurs
-Startup Wheel Vietnam: Southeast Asia's largest startup competition (9,700 startups from 31 countries across 5 continents since 2013)
-Vietnam Startup Day: an annual event for Vietnam's startup community
✔️ With the government's digital transformation initiative and the debut of mobile payment services, the fintech and commerce sectors continue to be strong, which can be seen in the investment status and Vietnamese unicorns.
✔️ Even in Korea, VCs such as The Invention Lab and The Ventures are actively investing in Vietnam.
Written by underdogs
0 Comments