Over the past time, the innovation ecosystem in Vietnam has had a strong transformation. In the current development context, many venture capital funds have quickly changed their strategies to catch up with new trends. According to the Report "Innovation and Technology Investment in Vietnam" on the panorama of investment for innovation and start-up in Vietnam in 2021, investment in startups increased significantly.

Investment growth for startups

The prolonged and complicated COVID-19 pandemic has been profoundly changing the way economic activities and social life are organized in all countries around the world. However, COVID-19 has become a catalyst to promote innovation and digital transformation in Vietnam in the past period. 2021 is a year that the economy faces many difficulties because of the COVID-19 epidemic, but it is also a record year for venture investment in Vietnam with a total investment of 1.44 billion USD, an increase of 1.5 times compared to the previous year. with the previous record of $874 million in 2019. According to the report "Vietnam Innovation and Technology Investment", in 2021 Vietnam has strongly risen to third place, behind Indonesia and Singapore. , about the countries that attract the most venture capital in Southeast Asia with 165 deals and the total investment value increased by 219.7% compared to 2020. This has gradually affirmed the position of “a rising star” in the Vietnamese startup sector in Southeast Asia.

Many industries have experienced strong growth, payment and e-commerce are still the two leading industries in attracting investment capital, the online game industry (Gaming) has risen to the third position among the industries. most invested. In addition, the COVID-19 pandemic caused a boom in transaction volume in a number of new industries, which in turn led to tremendous growth in investment amounts in these areas. The three most prominent industries include Health, Education, and Digital Transformation in enterprises with growth rates in 2021 of 1,016%, 526%, and 205% respectively.

Vietnam's startup market is also a favorite destination for 208 active venture capital funds, of which there are nearly 40 domestic investment funds. Big names and active funds in the market include VSV Capital - Nextrans, Vietnam Silicon Valley, Mekong Capital, 500 Startup Vietnam, Vietnam Investment Group, IDG Ventures Vietnam, Do Ventures and Genesia Ventures.

Top 5 notable investment deals in 2021

In 2022, the market continues to record many deals from investment funds into start-ups. Prominent as the Binance investment that poured 150 million USD into Sky Mavis; Asian private investment fund Quadria Capital announced to pour 90 million USD into the mother and baby brand Con Cung; SeaTown Private Capital Master Fund invests USD 50 million in OnPoint, a company providing solutions to support e-commerce development in Vietnam. In the same e-commerce space, cross-border e-commerce company OpenCommerce Group raised $7 million in a Series A funding round. Finhay raised $25 million in a Series B funding round led by Openspace Ventures . Start-up Entobel announced the completion of a 30 million USD funding round from Mekong Enterprise Fund IV and Dragon Capital. Jio Health - a start-up in the healthcare sector has completed a series B funding round worth USD 20 million led by the investment fund Heritas Capital. POC Pharma - SaaS platform in the pharmaceutical sector raised USD 10.3 million in Series A round led by Alven fund.

Improve startup's ability to attract capital

It can be said that the strong investment in startups is the result of the government's investment, formulation and policy stabilization. In recent years, the government has issued many national programs to support the startup ecosystem in the country. In 2021, the Prime Minister issued Decision No. 1158/QD-TTg approving the National Science and Technology Market Development Program to 2030. On May 11, 2022, the Prime Minister issued Decision Decision No. 569/QD-TTg promulgating the Strategy for Science, Technology and Innovation Development to 2030. In which, affirming that the development of science, technology and innovation is the top national policy, play a strategic breakthrough role in the new period; is the main driving force to promote growth, create breakthroughs in productivity, quality and efficiency; is a decisive factor in improving the competitiveness of the country, sectors, socio-economic fields, localities and enterprises; is the foundation for implementing national digital transformation; making an important contribution to improving people's living standards, sustainable development, and ensuring national defense and security.

To provide financial support for startup projects, Da Nang city has issued Resolution No. 328/2020/NQ-HDND dated December 9, 2020 of the City People's Council stipulating the content and spending levels from the state budget. to support the innovation startup ecosystem in Da Nang city until 2025. At the same time, Da Nang city currently has 4 startup investment funds as well as the business community that always accompany, Supporting innovative start-ups. However, in order to help startups reach and successfully call for investment capital, there should be more activities to support startups in product development, investment connection, product introduction, participation start-up and innovation contests, etc. Incubation activities, organization of intensive training courses on presentation skills, fundraising, teamwork, or consulting on optimizing operational and business models,... will help startups improve their thinking and action capacity, making it easier to convince investors.

In 2021, the city established the Da Nang Innovation Startup Support Center under the Department of Science and Technology, promoting the establishment of the Innovation Startup Investment Fund under Vicoland Group. Currently, in the city, there is an Innovation Startup Support Center under the Department of Science and Technology; 02 Centers under the University; 06 nurseries; 02 creative spaces; 09 coworking spaces; 10 Startup clubs and start-up centers at universities and colleges, through the city's incubation programs and support programs, have incubated 147 innovative and successful start-up projects. established about 57 innovative start-ups, including businesses that have attracted investment capital from hundreds of thousands of USD to millions of USD, such as Datbike Vietnam Co., Ltd., Hekate Technology Joint Stock Company, EM AND AI Joint Stock Company, Cashbag Joint Stock Company.

In the period of 2020-2022, the city has directly supported 22 projects, innovative start-up businesses and incubators with a total budget of 3,939 billion VND (in 2020 it has supported 07 innovative startups to develop products. products with a budget of 1,108 billion VND from the budget of science and technology. In 2021, support 02 Incubators to implement incubation programs and 08 start-up businesses to develop products with a budget of 1,728 billion VND. currently supporting 02 innovative start-ups, 02 business incubators, 01 educational institution under the University of Danang with a budget of 1,103 billion dong). Support tasks focus on perfecting technology, product testing, product development, business model improvement. At the same time, through the support of the incubation program of the Incubators, it has supported the development of 29 innovative start-up projects.

Funding for start-up activities over the years in Da Nang city

With the involvement of the government, the management from the Department of Science and Technology, organizations supporting innovation startups, investment funds and the business community hope that there will be more mature startups in Da Nang, call for larger investment capital, go into better marketability and develop sustainably.

Huynh Sang