Investment capital in start-ups will break through in 2021

Investment capital in start-ups will break through in 2021

Total investment capital in Vietnamese technology startups in 2020 decreased by 48% compared to 2019 but NIC and Do Ventures believe that this capital will break through in 2021…

On May 31, the National Innovation Center (NIC-Ministry of Planning and Investment) and Venture Capital Fund Do Ventures released the Vietnam Innovation and Technology Investment Report 2020.

The report said that 2020 is a challenging year but contains many opportunities for innovation and technology investment globally as well as in Vietnam.

solieu
Investment capital in start-ups will break through in 2021 4

Accordingly, the total investment capital in Vietnamese technology start-ups reached 451 million USD, down 48% compared to 2019, mainly due to the absence of significant investments that have been closed by large companies. in the previous year

However, the number of investments decreased slightly at 17%, of which 60 were recorded in the second half of the year – the same number as the same period last year. “This shows that, after a sharp decline in the first quarter of 2020, venture capital activity began to recover from the second quarter of 2020 onwards,” the report said.

Among the sectors attracting investment, payments and retail continue to receive the most large value investments due to their key role in the development of the Internet economy. Investment capital in the field of payment is 101 million USD and retail is 83 million USD.
Some industries such as HRTech (HR technology), PropTech (real estate technology) continue to attract investment, while industries such as EdTech (educational technology), MedTech (health technology), and SaaS (software as a service) is on the rise due to the change in behavior of consumers and businesses after Covid-19.

NIC DO Ventures
Investment capital in start-ups will break through in 2021 5

In the context of the general difficulties of the global economies due to the Covid-19 pandemic, the number of foreign investors only slightly decreased in 2020, showing that Vietnam is still an attractive destination for investors. The strongest activity came from domestic investors and investors from Korea and Singapore, while the number of investors from Japan decreased significantly.

Steady funding into early-stage startups is especially important for the health of the entire venture capital ecosystem. Do Ventures recorded more than half of the total number of investments in Vietnamese technology startups made by domestic investment funds.

“This is an indication of the important role that domestic investors play in supporting early-stage startups to continue to go further in this challenging period,” said Do Ventures.
Regarding the market outlook for 2021, the report said that although Vietnam's technology investment market experienced an inevitable slowdown due to the impact of Covid-19, founders in Vietnam have taken advantage of all available resources. able to survive and continue to grow because the crisis is always a powerful catalyst for disruptive business models to emerge.

“We believe that, with efforts from the Government to promote digital economic growth and create a favorable business environment to attract foreign investment, Vietnamese startups will have many opportunities to break through. when investment activity gradually recovers," the report emphasized.

NIC DOventures
Investment capital in start-ups will break through in 2021

Vietnam Innovation and Technology Investment Report 2020 was released on the basis of cooperation between Do Ventures and NIC. This is a typical project for a successful combination between a private venture capital fund and a state agency with the common goal of building an innovation ecosystem in Vietnam.

Publication: 2020

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