Total investment in Vietnam’s tech startups fell 52.7% to $46.5 million in the first half of 2024 from $98.5 million in the first half of 2023, Traxun said on Tuesday.
Vietnam’s tech startup ecosystem has weathered challenges in the first half of 2024, reflecting trends in the broader global economy, said a global SaaS (software-as-a-service)-based market intelligence platform in its “Geo Semi-Annual Report: Vietnam Tech H1 2024”.
The data revealed that funding has been significantly cut, but some sectors continue to perform strongly.
Total funding for Vietnam’s tech startups, ranked as the 45th highest-funded country in the world in the first half of 2024, also fell from the $77.4 million raised in the second half of 2023, signaling a changing investment landscape.
In comparison, the US, UK and China took the top three positions in global fundraising.
Vietnamese tech startups raised $5.2 million in seed-stage funding in the first half of 2024, down 29% from $7.4 million in the second half of 2023 and down 23.5% from $6.8 million in the first half of 2023.
The country’s early stage investment volume was $41.3 million, down 41% from the $70 million raised in the second half of 2023 and down 53.4% from the $88.6 million in the first half of 2023.
Additionally, mirroring the trend in the second half of 2023, there was no funding for late-stage startups in the first half of 2024, but $3 million was raised in the first six months of 2023.
In terms of fundraising, Ho Chi Minh City topped the list, followed by Hanoi and Binh Tan, revealing the regional distribution of investment within Vietnam.
Ho Chi Minh City-based tech startups raised $36.3 million in the first half of 2024, while Hanoi- and Binh Tan-based startups raised $7.7 million and $2.5 million, respectively.
At a sector level, transportation and logistics technology, EdTech and retail emerged as the strongest performing sectors in the first half of 2024, highlighting strategic areas of growth despite an overall decline in funding.
Funding for companies in the transportation and logistics technology sector recorded a significant 940% increase, from $3 million in the first half of 2023 to $31.2 million in the first half of 2024.
In the edtech sector, funding also increased 280% from $2.5 million in the first half of 2023 to $9.52 million in the first half of 2024.
However, no new unicorns were born in the first half of 2024, continuing the same trend as the previous period.
The mergers and acquisitions (M&A) scene has also contracted, with only two deals in the first half of 2024 compared to three in the first half of 2023.
Notably, RHB Vietnam Securities was acquired by Public Bank for $15.2 million, making it the highest-value acquisition in the first half of 2024, following SCBX’s acquisition of HomeCredit Vietnam.
Investment activity in Vietnam’s tech ecosystem was driven by major firms such as CyberAgent Capital, Insignia Ventures Partners and Genesia Ventures, which continued to be the top investors overall.
Northstar Ventures, Ansible Ventures and Monk’s Hill Ventures also stood out as major contributors to the investment environment in the first half of 2024.
“Despite funding challenges, Vietnam’s tech startup ecosystem continues to demonstrate resilience with strong performance in key sectors and strategic local investments,” Tracxn said.
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