Total funding into Vietnam tech startups dropped 52.7 percent to $46.5 million in the first half of 2024, compared with $98.5 million in the first half of 2023, Tracxn said Tuesday.
The global software as a service (SaaS)-based market intelligence platform said in its “Geo Semi-Annual Report: Vietnam Tech H1 2024” that Vietnam’s tech startup ecosystem has navigated a challenging landscape in the first half of 2024, reflecting broader global economic trends.
The data revealed significant funding reductions, yet certain sectors continue to demonstrate robust performance.
Ranking as the 45th highest funded country globally in the first half of 2024, Vietnam’s tech startups total funding also declined from the $77.4 million raised in the second half of 2023, illustrating the shifting investment climate.
In comparison, the United States, the United Kingdom, and China secured the top three positions for funding worldwide.
Vietnam tech startups garnered seed-stage funding worth $5.2 million in the first half of 2024, representing a 29 percent drop from $7.4 million in the second half of 2023 and a 23.5 percent decline from $6.8 million in the first half of 2023.
The country’s early-stage investments stood at $41.3 million, a 41 percent decrease from the $70 million raised in the latter half of 2023 and a 53.4 percent drop from $88.6 million in the first half of 2023.
Furthermore, there was no funding for late-stage startups in the first half of 2024, mirroring the trend from the second half of 2023, whereas $3 million was raised in the first six months of 2023.
Ho Chi Minh City led the funding space, followed by Hanoi and Binh Thanh, showcasing the regional distribution of investment within Vietnam.
Tech startups based in Ho Chi Minh City raised $36.3 million in the first half of 2024, while those based in Hanoi and Binh Thanh raised $7.7 million and $2.5 million respectively.
Sector-wise, transportation and logistics tech, EdTech, and retail emerged as the top-performing sectors in the first half of 2024, highlighting strategic growth areas despite the overall funding decline.
Companies in the transportation and logistics tech sector witnessed a huge spike of 940 percent in funding, from $3 million in the first half of 2023 to $31.2 million in the first six months of 2024.
The Edtech segment, too, recorded a 280 percent surge in funding, from $2.5 million in the first half 2023 to $9.52 million in the first half of 2024.
However, no new unicorns were created in the first half of 2024, continuing a similar trend in the previous period.
The merger and acquisition (M&A) landscape also saw a contraction, with only two acquisitions 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, marking the highest-valued acquisition in the first half of 2024, following the Home Credit Vietnam by SCBX.
Investment activity in Vietnam’s tech ecosystem was driven by key players such as CyberAgent Capital, Insignia Ventures Partners, and Genesia Ventures, who remained the top investors overall.
Northstar Ventures, Ansible Ventures, and Monk’s Hill Ventures also stood out as significant contributors to the investment landscape in the first half of 2024.
“Despite the funding challenges, Vietnam’s tech startup ecosystem continues to exhibit resilience, driven by strong performances in key sectors and strategic regional investments,” Tracxn said.