On the morning of April 21, 2022, the National Innovation Center (NIC) - Ministry of Planning and Investment and Venture Capital Fund Do Ventures held a ceremony to announce the Report on Innovation and Technology Investment. Vietnam. Accordingly, 2021 marks a record year for venture investment in Vietnam.
This is the second year that the Vietnam Innovation and Technology Investment Report has been released on the basis of a partnership between Do Ventures and NIC. The event was held on April 21, the day chosen by the United Nations as World Innovation Day.
2021 – RECORD YEAR OF VCCIAL INVESTMENT IN VIETNAM
Speaking at the announcement, Deputy Minister of Planning and Investment Tran Duy Dong said: "The prolonged Covid-19 pandemic with complicated developments has been and is profoundly changing the economic order and structure, the way of global governance, the way of economic activity and the organization of social life of all countries in the world. Despite posing many challenges to the economy, Covid-19 has become a catalyst to promote innovation and digital transformation in Vietnam in the recent period. Digital technology has helped many businesses through the crisis and has also enabled many companies to achieve tremendous growth.”
Indeed, after a difficult year 2020, the domestic innovation and startup ecosystem has recovered and risen to new heights.
Sharing about the report's results, Ms. Le Hoang Uyen Vy, CEO of Do Ventures Fund, said that amid the Covid-19 pandemic causing many fluctuations to the market, venture capital for startups Vietnam still achieved a record high in 2021. Total investment amount reached 1.4 billion USD, a growth of 1.5 times compared to the previous record 874 million USD in 2019. In addition, The total number of investment deals also reached the highest figure ever of 165, an increase of 57% compared to 2020.
Investor's taste has quickly shifted to focus on industry groups that have not been strongly impacted by the pandemic. Moreover, the convenience of webinar applications also makes travel restrictions no longer a barrier in the investment decision-making process.
In 2021, Vietnam welcomes the arrival of two new technology unicorns, Momo and Sky Mavis, thanks to the increasing frequency of users using digital products during the epidemic. The success of these two companies further affirms Vietnam's position as an emerging technology hub of the region. Innovation in Vietnam has a promising future as dozens of companies with a valuation of several hundred million US dollars are thriving and will soon become new unicorns in the coming years. .
INVESTMENT IN GAMING SURPRISE
While payments and e-commerce are still the top two industries in attracting investment, the online gaming industry (Gaming) has risen to third place among the most invested industries thanks to the Sky Mavis' global success with its Axie Infinity product.
In addition, the Covid-19 pandemic created an explosion in transaction volume in a number of new industries, which in turn led to a remarkable growth in the amount of investment in these areas. The three most prominent industries include healthcare, education, and digital transformation in enterprises with growth rates in 2021 of 1,016%, 526%, and 205%, respectively.
HUGE CAPITAL DEPOSIT REARS AGAIN
The amount of money invested in fundraising rounds over 10 million USD reached a record of nearly 1.2 billion USD, accounting for more than 82% of the total investment capital of the whole year of 2021. Meanwhile, the same proportion of previous years are 74% in 2021 and 78% in 2019.
The capital for rounds with a value of less than 10 million USD has also reached a new threshold of 256 million USD, an increase of 118% compared to 2020. Investment capital is distributed relatively evenly between the fundraising stages over the years. Recently, it shows the stable development of Vietnam's startup ecosystem.
While the capital inflow into the Seed round increased to a record high in both volume and value of the deal, the capital inflow into the series A rounds has returned to pre-Covid levels.
In particular, 2021 will see the appearance of 5 transactions worth over 100 million USD in the fields of payment, e-commerce and Gaming. With a large number of potential early-stage companies and a favorable business environment thanks to the close support of the Government, Vietnam's innovation ecosystem is ready to enter the mature stage. become more.
VIETNAM RANGES 3rd in the region in terms of INVESTMENT NUMBER AND VALUE
Venture capital activity in Southeast Asia has seen inclusive growth in most countries as the region has been less affected by the pandemic than elsewhere in the world. In terms of year-on-year growth, Vietnam leads in terms of investment volume and ranks third in investment value after Singapore and the Philippines.
Investment in startups in Vietnam accounted for 13% of the total investment value of all companies in Southeast Asia, an increase of 5 percentage points compared to 2020. The share of Vietnam's investment volume in 2021 also increased 2 percentage points compared to the previous year.
Le Hoang Uyen Vy, CEO of Do Ventures, affirmed: “The innovation and start-up ecosystem in our country has made impressive recovery steps in 2021 thanks to the persistence of businesses. as well as timely support from the Government. With the current momentum of development, I believe that the founders of Vietnam will continue to achieve success and make Vietnam a remarkable technology hub in the region.”
WHAT NEXT?
The report predicts that e-commerce and Fintech will continue to be the two leading areas as more and more consumers use products online. In it, there will be a wave of new models of interest in these two areas, such as online grocery, D2C model, quick commerce, along with financial solutions. such as asset management, consumer lending, small and medium-sized business loans, etc.
Investors will also continue to be interested in new potential areas such as the creative economy, upskill platforms and web 3.0 with the ubiquity of cryptocurrencies. electronics and blockchain technology.
In order to take advantage of opportunities and anticipate trends, Mr. Vu Quoc Huy, Director of NIC said: “NIC will continue to research and propose outstanding policy mechanisms, experimental legal frameworks (sandboxes) to encourage encouraging innovation activities on a national scale, ensuring regional and international competitiveness. With the achievements we have achieved in 2021, we can believe that 2022 will be the pivotal year for Vietnam's innovation ecosystem to have breakthrough developments, opening up many opportunities for the new generation. the next stage of development of innovation enterprises and Vietnam's digital economy”.
