The most funded startup categories in Vietnam last year were all based on advanced technological applications.
Last year, investment in Vietnamese startups tripled from 2017. Photo by Shutterstock/Paisit Teeraphatsakool
A report recently released by Topica Founder Institute (TFI), a startup accelerator program in Vietnam and Thailand run by Hanoi-headquartered multinational educational technology company Topica, says 92 major investment deals totaling $889 million were struck in Vietnam last year.
The investment in Vietnamese startups tripled from 2017.
Among these, the top five areas in attracting funding were Fintech, E-Commerce, Travel Tech, Logistics and Education Tech.
Fintech ranked first with eight deals worth $117 million last year, according to TFI.
Experts have said that Vietnam has a lot of potential for fintech development. According to a report by consulting firm Solidiance, the value of Vietnam’s fintech market is set to increase from $4.4 billion in 2017 to $7.8 billion in 2020.
But fintech remains a new category in Vietnam with a small-scale ecosystem compared to other ASEAN members like Singapore and Indonesia, it said.
While most startups are currently operating in online payment, e-wallet and peer-to-peer lending, the market lacks development in insurance tech, credit scores and crowd-funding, it added.
E-commerce attracted five major deals with a total investment of $104 million last year.
The e-commerce market in Vietnam has a promising future with 53 percent of the population using the Internet and almost 50 million smartphone subscriptions among population of over 94.6 million, according to the Vietnam E-commerce Association (VECOM).
Data from Statista also shows that Vietnam’s e-commerce sector grew 29.4 percent last year from 2017, making the country the sixth largest market in Southeast Asia.
The number of e-commerce customers grew by 2.6 percent from 2017 to 49.8 million last year, accounting for over half of the country’s population, according to the Vietnam E-commerce and Digital Economy Agency (iDEA).
Dang Hoang Hai, head of iDEA, estimated that the e-commerce market in Vietnam could be valued at $13-15 billion next year, instead of the previously estimated $10 billion.
Eight major travel tech deals worth $64 million were signed last year, according to TFI.
The funding was obtained by online flight and accommodation booking services like Vntrip, Luxstay and Atadi.
Pham Mai Linh, CEO of Bill&Bros, which develops technology for travel services, said that the travel tech market is full of potential as increasing numbers of people seek to travel and enjoy life.
The development of social networks allows more travel services to be established, leading to higher demand, she said.
Logistics startups in Vietnam raised $54 million last year.
Vietnam has seen new startups in the logistics sector in recent years, including "Uber for truck" app Logivan and ride-hailing FastGo.
With over 1 million trucks, the truck transport market is worth $23 billion with an annual growth of about 14 percent, it is estimated.
But 90 percent of transport businesses are small operations with less than five trucks, and 70 percent of trucks return empty after dropping off their load.
This makes the logistics cost over GDP ratio in Vietnam high at 23 percent, compared to 15 percent in China and 8 percent in Singapore.
With 23.4 million students in a fast-growing economy, Vietnam is seen as a market with great education tech (edtech) potential.
Last year, edtech startups in Vietnam raised $54 million.