The startup scene in Southeast Asia is definitely gaining much attention. Vietnam is one that features a rapidly rising tech ecosystem. Emerging largely unscathed from the global financial crisis, Vietnam has grown by 6% on average each year over the past 10 years, making it one of the fastest-growing economies worldwide.
Vietnam is also home to one of the largest young populations in the world, more than 60% of its 97 million inhabitants are under the age of 35. Hence, Vietnam is seen to have an abundant source of labor. The talent pool in Vietnam has a growth mentality and is increasingly educated. Especially in the field of programming, Vietnamese students are known as the 3rd best in the world in terms of coding skills. Another characteristic of the population of Vietnam is a high rate of internet penetration, there were approximately 50 million users in 2017. The number is projected to climb to 60 million by the end of 2019. The online consumer base is expanding and given that the majority of the people are young and tech-savvy, it could be an optimal market for tech or foreign startups.
Photo by Robert Metz
For the startup ecosystem in Vietnam to flourish further, the government will no doubt play an important role. The Vietnamese government is in fact aggressively promoting small enterprises. It has imposed some policies to help strengthen the nation’s competitiveness, one of which is an initiative program conducted by the Ministry of Science and Technology. The objective of the initiative is to establish a positive environment to support and develop startups. Additionally, Deputy Prime Minister Vuong Dinh Hue announced in 2017, the goal of doubling the number of businesses in Vietnam from 500 thousand to 1 million by 2020.
These factors have made Vietnam one of the most vibrant startup scenes in the world. It can be seen that the contribution of startups to the economy of Vietnam is increasing as there are more players and fewer barriers to entry. It was reported that in the 1st quarter of 2017, startups in Vietnam increased by almost one-sixth, with nearly 40 thousand of them entering the market. Moreover, the amount of funding in 2017 that local startups received was in the region of US$300 million, double the amount of the previous year. Most of these are in the tech sector and with IT labor cost at 40% less than in China or India, the industry is poised to grow exponentially.
With resources behind them and a positive climate for tech businesses, there are a number of Vietnamese startups showing immense promise. Since food resonates well with most of us and is a continual demand, let’s take a look at Foody which was founded in 2012 in Ho Chi Minh City. It provides food recommendations, lists of restaurants and value added services such as order delivery and reservations for the customers in the local market. With more than 9 million monthly web visitors, Foody.vn is ranked 6,130 among websites globally. Being one of the most successful startups in Vietnam, Foody received several rounds of funding by an array of investors. Japanese VC firm, Cyberagent Ventures and Pix Vine Capital based in Singapore provided Seed and Series A funding. In 2017, the consumer internet group, SEA Limited, also based in Singapore acquired around 82% of the company for US$64 million, the largest investment of the year. SEA Limited previously funded a Series B round in 2015 while Tiger Global Management raised Series C investment in the same year.