Vietnam startups have raised a total of $40.6 million in funds in the first quarter, a 49 percent lower as compared to $80.1 million in the same period in the previous year, Tracxn Technologies said Monday.

The India-based market intelligence platform said in its Tracxn Geo Quarterly Vietnam Tech Report – Q1 2023, the total funding in the first quarter was a 40 percent increase compared to the fourth quarter of 2022.

According to Tracxn, the fourth quarter of 2021 witnessed the highest funding in this space in the past decade, after which the funding has been declining.

“Vietnam’s economy has been going through a significant transition, with an uneven recovery from the COVID-19 pandemic and the effect of the ongoing Russia-Ukraine war on the global economy,

“Vietnamese tech firms are currently experiencing a funding winter, and the repercussions of the slowdown are evident,” it said.

Tracxn said the lack of late-stage funding has caused a decline in overall funding volume.

It said late-stage investments into Vietnam Tech startups have remained null for three consecutive quarters.

Meanwhile, early-stage rounds in the first quarter saw funding of $40.6 million with a rise of 132 percent compared to $17.5 million in the fourth quarter of 2022.

However, it was a drop of 23 percent as compared to the first quarter of 2022.

It is also noted that seed-stage funding was adversely affected because there were no rounds in the first quarter of 2023 as against 15 rounds in the same period in 2022.

Vietnam did not lead to the creation of any new unicorns, since the fourth quarter of 2021.

In the first quarter, the entire funding in the Vietnam Tech space came from companies in two cities – Ho Chi Minh City ($35.5 million) and Hanoi ($5.1 million).

The most active investors in this sector are VinaCapital, CyberAgent Capital, and Insignia Ventures.

The most active investors in the first quarter were Touchstone Partners, Resolution Ventures, and UOB.

Tracxn is a data intelligence platform for private market research, tracking 1.8 million entities through 1800+ feeds categorised across industries, sub-sectors, geographies and networks globally.

The report, which the company releases on a quarterly basis, gives a thorough snapshot of the Vietnamese tech startup ecosystem by highlighting funding activity, investor exits through acquisitions and initial public offerings (IPOs), and broader trends in the fundraising landscape.

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