Vietnam’s startup environment is dynamic and is rapidly growing. However, human resources are one of several challenges for tech start-ups. Vietnam Briefing addresses key issues in tech startup talent and approaches for attracting and retaining them. Vietnam is now the third most active startup ecosystem in Southeast Asia, behind only Singapore and Indonesia. The start-up scene in Vietnam has developed rapidly in the past decade, benefitting from governmental policies, tax incentives, and changes in consumer behaviors.
Why Does it Matter
Vietnam is home to 3,800 startups, along with 200 venture capital and 100 startup incubators. The four unicorns in Vietnam are VNG, VNLife (VNPay), M_Service (Momo), and Sky Mavis. Out of the total investment value of US$1.35 billion in 2021, many deals are worth millions. Some notable investments include the US$250 million investment into VNLife (Series B), US$258 million in Tiki (Series E), US$200 million in Momo (Series E), and US$45 million in KiotViet (Series B). The large investments into these start-ups highlight how the capital market is focused on tech businesses. Hanoi and Ho Chi Minh City have developed a robust ecosystem for tech startups, with dominating sectors including artificial intelligence (AI), e-commerce, fin-tech, and enterprise solutions.
Following integration into the ASEAN Economic Community and an increased presence of global tech companies, more investors want to put money into startups in Vietnam. With arguably the fastest-growing tech scene in Asia, new startups in Vietnam will achieve an increasing amount of investment over the next decade. Yet the startup ecosystem in Vietnam is still young. It just passed the second stage of activation and now is going into the third phase of development which is the globalization stage. Regardless of size, human resources are one of several challenges for tech start-ups. 90 percent of startups fail within their first year and “personnel crisis,” which causes companies to end before they are fully developed, is one of the key causes of this failure.