Tracxn, a leading global SaaS-based market intelligence platform, has released its Geo Annual Report: Vietnam Tech 2023. The report, based on Tracxn’s extensive database, provides insights into the Vietnam Tech space.
Vietnam has secured the fourth position in 2023 based on Year-to-Date (YTD) funding, marking the lowest funding year for the region since 2019. The Southeast Asia (SEA) region itself has experienced a significant decline in funding, making 2023 the least funded year in the past five years. This downturn is attributed to increased interest rates, a global economic slowdown, and geopolitical tensions, resulting in a cautious approach from investors and a subsequent slowdown in investment activities.
The Vietnamese Tech startup ecosystem has raised a total of $142 million in funding to date, reflecting a drop of 73% and 91% compared with the funds raised in the same period in 2022 and 2021, respectively. This substantial decrease is particularly noticeable in late-stage funding, plummeting from $30 million in 2022 to a mere $3 million in 2023 YTD, a massive 90% fall.
The overall seed-stage funds in 2023 YTD stands at $10.4 million. The seed-stage funding has dropped by 84% and 82% in 2023 YTD compared to 2022 and 2021, respectively. Early-stage funding witnessed a 70% drop to $129 million in 2023 YTD compared to $431 million raised in the same period in 2022.
Thuocsi, a pharmaceutical e-commerce app, secured $51.5 million in the Series B round, marking the highest funding round in the Vietnamese Tech space in 2023. The region did not witness any $100 million+ rounds in 2023. Likewise, there were no IPOs or unicorns in the Vietnamese tech sector in 2023. Though this year witnessed three acquisitions, a 40% decline compared to five in 2022. The acquisition of Symplefy by GoLogiq stands out as a major acquisition in 2023.
HealthTech, FinTech, and Enterprise Applications are the leading sectors in terms of funding in 2023 YTD. HealthTech sector witnessed positive growth, increasing by 35% to $53.5 million. The FinTech sector secured a total funding of $35.3 million in 2023 YTD, a drop of 84% compared to the funds raised in the previous year. Gimo, an employee payment solution for enterprises has raised a total of $17 million through two Series A rounds, contributing a major chunk of funds in this sector
Ho Chi Minh City emerged as the highest-funded city in 2023 with a total funding of $97 million, followed by Hanoi which gathered $45 million. Nextrans, Vietnam Silicon Valley, and VSV Capital rank as the overall top investors.
Despite these challenges, positive prospects emerge with the United States plans to diversify its manufacturing dependency on China through the "China plus one" strategy. In October 2023 alone, the SEA region received over twice the monthly average of Foreign Direct Investment (FDI), primarily directed towards establishing manufacturing units in Vietnam. Despite the challenges posed by the funding landscape the combination of government initiatives and increased investments is expected to bolster economic activity, positioning the country for future growth.
