Funding for Vietnamese tech startups dropped to $120 million in 2024, a 38% decline from 2023. Notably, late-stage investments resumed activity, while sectors like the gig economy saw remarkable growth. Despite Ho Chi Minh City leading with funding, the overall landscape reflects challenges and opportunities for innovation amidst reduced investment levels.
In 2024, Vietnamese tech startups raised $120 million, down 38% from $196 million in 2023 and a staggering 77% drop from $518 million in 2022, according to Tracxn’s Tech Annual Report. Late-stage investment witnessed renewed activity with funding hitting $14.2 million, marking a rebound since 2021. While Vietnam ranked 51st in global funding, it trailed behind the leading countries like the US, UK, and China.
Funding in Vietnamese tech declined further in both halves of the year. In H2 2024, funding dropped to $53.6 million, a 19.63% decrease from H1’s $66.7 million, also falling 41.68% compared to $91.9 million in H2 2023. The fourth quarter saw a notable increase to $35.1 million, an 89.73% rise from Q3 but still questioned its sustainability.
Seed-stage investments also faltered by 32.37%, with total funding down to $11.7 million in 2024 from $17.3 million in 2023. Early-stage funding saw a drop of 47.26%, totaling $94.4 million this year, compared to $179 million last year. Sectors experiencing growth included gig economy, auto tech, and transportation, surfacing as the leaders among the tech landscape.
The gig economy thrived with funding rising from $1 million in 2023 to $38.2 million in 2024, marking a staggering increase of 3715%. The auto tech sector similarly bloomed, escalating to $35.3 million from $3 million. Meanwhile, transportation and logistics tech saw funding reach $34.3 million, showing impressive growth against previous years.
Ho Chi Minh City tech firms captured 56.59% of total funding, while Hanoi accounted for 26.25%. The report indicated no funding rounds surpassed $100 million, and the year saw no new unicorns emerging in the tech space. A notable absence of initial public offerings contributed to the cautious outlook.
Top investors fueling the ecosystem included CyberAgent Capital, 500 Global, and Genesia Ventures. Conversely, acquisitions also dwindled, with three recorded in 2024 compared to four in 2023, highlighted by Public Bank’s $15.2 million acquisition of RHB Vietnam Securities, the highest of the year.
The evolving Vietnamese tech landscape presents both obstacles and opportunities, with varying impacts across funding stages and sectors. The report underscores a complex ecosystem where adaptation and strategic focus are pivotal as stakeholders navigate these tumultuous waters, shaping the future of tech in Vietnam.
Vietnam’s tech startup scene is a vibrant but challenging sector that has seen substantial shifts in funding and investment patterns over the past few years. This analysis offered by Tracxn highlights the decline in funding levels, showcasing the implications of broader economic conditions and industry dynamics. Such insights are crucial for understanding where Vietnamese startups stand on the global venture capital landscape and how various sectors are performing under the current market pressures.
The report on Vietnamese tech funding unveils a narrative of decline amidst pockets of growth within specific sectors such as the gig economy and auto tech. While overall funding has plummeted in 2024, key players and sectors continue to show signs of resilience. However, the absence of substantial acquisitions or new unicorns underscores the need for strategic initiatives to revitalize the ecosystem. Entrepreneurs and investors must adapt to the shifting dynamics as Vietnam’s tech scene endeavors to emerge stronger.
Original Source: technode.global
