Vietnamese startups attracted investments of over 1.3 billion USD in 2021, while fintech received nearly 70% according to Khiem Tran from Expara. However, new fintech startups have not shaken the market like Momo, VNPay or Finhay did.
As an early believer of Vietnam venture capital market, Khiem explained the reason behind is that “due to bargaining power, legal barriers, the readiness of the technology, startups’ resources, etc… startups are still unable to receive support from financial institutions. It used to take 1-2 years for a startup to partner up with a financial institution. But now, this has been improved, which is good news.”
100 projects among 3,800 startups in Vietnam have successfully raised funds each year. Mr. Huynh Kim Tuoc – CEO of Saigon Innovation Hub is not impressed by this statistic “With more than 200 investment funds operating in Vietnam, only 147 projects were funded in 2021 mostly by foreign investors.” He hopes for capital investment will reach more startups and increase the closed deal number by 2022.”
“Policies need to be changed and to create a favorable environment to support the startup ecosystem. Business promotion organizations and incubators must also change to help startups attract more funding.” – said Vu Viet Ngoan, CEO of Viet Lotus Corporation.
Venture capture is looking for 117-200 investment deals in 2022, in which fintech will focus. Therefore, SIHUB and Viet Lotus Corporation have signed a cooperation agreement to develop the startup ecosystem in the near future.
Vietnam is ranked high on the 2021 Global Crypto Adoption Index of Chainalysis. Vietnamese fintech startups have yet to tap into the crypto market because they are still in the incubation and technology development stage, explains Khiem. He advises that instead of focusing on crypto to compete with the advanced international market or mass market, Vietnam should leverage blockchain technology to capture the niche market first, and then expand.
Founders should focus, focus, and focus. He believes that Vietnam will apply blockchain successfully in the next 5-7 years “The fact is that it is very difficult to predict the future, but disruptive technologies like blockchain, typically have a long early period of slow growth. Then they hit an inflection point, then they grow exponentially.”