Editor’s note: this story has been updated with additional background and information. Vingroup’s commitment to the Ho Chi Minh City municipal venture capital fund is VND60 billion, not VND600 billion.
Vietnam’s establishment of state funds for venture capital, such as Hanoi with a VND600-billion ($22.8 million) venture capital fund and Ho Chi Minh City with VND500 billion, is expected to help boost private venture capital sector in Vietnam, according to venture capital firms.
Lotte Ventures Vietnam CEO Pham Ngoc Huy told TNGlobal that the announced initial capital of VND500 billion of Ho Chi Minh City’s venture fund is consider “modest” as compared to the actual market demand.
According to him, many startups in Southeast Asia can raise over $100 million in a single funding round, while some Vietnamese startups reached $40 million in funding rounds.
More importantly, domestic capital serves as a “vote of confidence” for international investors, he said. Foreign funds often assess the level of local participation before committing capital, viewing it as an indicator of market validation and reduced risk, Pham highlighted. Lotte Ventures Vietnam is a corporate ventures capital focusing on seed to Series A startups in Vietnam. Lotte Ventures is the venture capital arm of Lotte Group, a multinational corporation headquartered in South Korea with with 90+ subsidiaries in various industries including retail, F&B, chemical, and construction.
In early March, the authorities in Vietnam’s Ho Chi Minh City approved a plan to establish a venture capital (VC) fund. The fund is expected to launch with an initial charter capital of VND500 billion (about $19.1 million), with the municipal government contributing VND200 billion (40 percent), earlier media reports showed. By 2035, the city plans to expand the fund’s size to at least VND5,000 billion ($190.7 million) by attracting additional private capital.
With the initiation of Ho Chi Minh City, many local firms have announced their plans to contribute to the municipal venture capital fund, according to Pham, such as ride-hailing service Xanh SM which will be pouring in VND30 billion, top conglomerate Vingroup with VND60 billion, investment management firm VinaCapital with VND10 billion.
Meanwhile, ThinkZone Ventures Investment Director Doan Hai Nam emphasized that government funding is essential for sectors with extended development cycles such as healthtech and biomedical innovation.
“These are areas that require five to 10 years of sustained investment before generating revenue,” Doan told TNGlobal when met at the Hanoi Founders’ Lunchup. “That timeline exceeds the appetite of most private investors.”
According to Doan, state capital is uniquely positioned to act as “patient capital,” supporting startups through early-stage uncertainty and enabling the development of foundational technologies until they reach commercialization. Without this support, many promising innovations may fail to secure the long-term funding needed to survive.
Vietnam’s domestic venture capital market remains constrained—particularly in mid-sized funding rounds between $10 million and $30 million. This shortfall has pushed many startups to seek foreign capital earlier than expected, he said.
However, foreign investors also come with high return expectations, often requiring companies to grow rapidly and target large markets—pressuring startups to expand beyond Vietnam, he highlighted. Startups need to aim at a sufficiently large market, not only Vietnam.
“In reality, Vietnam, although with the population of 100 million people, the average income per capita of $5,000 showed a lackluster purchasing power and market size,” Doan stressed.
Vietnam’s venture capital landscape reached 41 transactions, alongside total funding reaching around $215 million in 2025, according to the ‘Vietnam Tech & Venture Capital Outlook 2025’ report published by VinVentures. VinVentures is the venture capital arm of top conglomerate Vingroup.