Investments in Vietnamese Startups Tripled in 2018

January 25, 2019 Posted by Vietnam Briefing Written by Koushan Das Reading Time: 2 minutes

In 2018, investments in Vietnamese startups reached US$889 million, nearly triple the deal value compared to US$291 million in 2017, according to a report released by Topica Founder Institute (TFI), a startup accelerator programme. The number of deals in 2018 was the same as 2017, at 92.

Last year was a significant year for Vietnamese startups with Yeah1, a digital video firm being listed on the Ho Chi Minh City Stock Exchange at a valuation of $500 million. In addition, VNG, an internet and gaming firm, is on track to be the country’s first unicorn with a valuation of over US$1 billion.

Funding

Domestic investment funds accounted for more than half of the US$889 million funding. Some of the major funds announced included Vingroup Venture’s US$300 million fund, VinaCapital Venture’s US$ 100 million fund, and others such as VietCapital Ventures, Startup Viet Partners, and Teko Ventures.

Business Intelligence

Existing domestic venture capital funds such as ESP Capital, 500 Startups, and VIISA, accounted for 60 percent of the total pre-seed and seed investments.

Overall, seed and pre-seed investments accounted for US$10 million for 48 deals. Series A and Pre-A investments reached US$136 million for 22 deals, while Series B, C, and D investments reached US$86 million (six deals), US$178 million (five deals), and US$50 million (one deal) respectively.

Acquisitions and Pre-IPO investments accounted for US$417 million for nine deals.

Top Deals

The top 10 deals attracted US$734 million, accounting for 83 percent of the total deal value. Major investments included US$100 million in entertainment group Yeah1, US$51 million in e-commerce platform Sendo, and US$50 million in educational technology group Topica.

Seven undisclosed deals attracted a combined investment of US$533 million.

Last year also witnessed several M&A deals, such as Grab’s acquisition of Moca, Yeah1’s acquisition of Netlink, and VnTrip’s merger with Atadi.

Sectors

The top five sectors in terms of investments in 2018 were fintech, e-commerce, travel tech, logistics, and educational tech.

Fintech led with eight deals worth US$117 million, followed by e-commerce with five deals worth US$104 million. Travel related startups attracted US$64 million for eight deals, followed by logistics and educational tech at US$50 million.

Investments in 2018 not only highlights the potential of the domestic startup sector but also demonstrates the growing interest and capability of domestic investors for funding startups.

Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Hanoi and Ho Chi Minh City. Readers may write vietnam@dezshira.com for more support on doing business in Vietnam.