Capital investment in Vietnam’s innovation almost doubles

06:00 | 27/05/2022 Science - Technology

(VEN) - With total venture capital for startups reaching a record level and the emergence of two new technology unicorns in 2021, Vietnam has many opportunities to attract capital for innovation.

Impressive growth

According to Deputy Minister of Planning and Investment Tran Duy Dong, in recent years, Vietnam has adopted many mechanisms and policies for innovation, as reflected in the Global Innovation Index (GII), on which Vietnam jumped from 52nd place (out of 141 countries) in 2015 to 44th (out of 132) in 2021. It also tops the group of 29 countries with the same income level.

The Vietnam Innovation and Technology Investment Report 2021 was jointly released by Vietnam National Innovation Center (NIC) under the Ministry of Planning and Investment (MoPI) and the venture capital firm Do Ventures, providing an overview of investment in innovation and startups.

It reported that 2021 was a record year for venture investment in Vietnam with total investment of US$1.4 billion, compared to the previous record of US$874 million in 2019. Last year also saw the appearance of two new technology “unicorns” - Momo and Sky Mavis.

NIC reported that the total number of investment funds participating in Vietnam increased by 60 percent. Total transactions of deals over US$10 million exceeded US$1 billion, up 255 percent over the previous year. While the capital inflow into the seed round increased to a record high in both volume and value, the capital inflow into the rounds after series A has returned to pre-COVID-19 levels.

Five transactions worth over US$100 million in the fields of payment, e-commerce, and gaming were also recorded in 2021. According to CEO of Do Ventures Le Hoang Uyen Vy, the e-commerce and start-up ecosystem in Vietnam had made an impressive recovery thanks to the persistence of businesses, as well as timely government support. With this momentum, Vietnam will continue to achieve success and become a significant technology hub in the region, Vy added.

Pivotal year

Economic experts point to the success of the Momo and Sky Mavis unicorns as affirming Vietnam’s position as an emerging technology hub in the region.

The e-commerce and start-up ecosystem in Vietnam made an impressive recovery in 2021

Dong said that in order to facilitate investment capital in innovation, Vietnam recently issued specific mechanisms and policies, including Resolution No52-NQ/TW of the Politburo, which affirms that enterprises are the focus of the national innovation ecosystem.

NIC Director Vu Quoc Huy said the center will continue to do research and propose outstanding mechanisms, policies, and experimental legal frameworks (sandboxes) to encourage innovation on a national scale, ensuring regional and international competitiveness.

Accordingly, he said that 2022 is a pivotal year for Vietnam’s innovation ecosystem to make breakthroughs and open up opportunities for the next development stage of Vietnam’s innovative enterprises and digital economy.

Impressive results in attracting venture capital for technology startups in 2021 will help realize the goal of

Vietnam's digital economy to account for 30 percent of GDP by 2030.

Nguyen Hoa