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 a VND500-billion, can help boost private venture capital in Vietnam, according to experts.
Pham Ngoc Huy (speaking), CEO of Lotte Ventures Vietnam. Source: Hanoi Founders’ Lunchup
Pham Ngoc Huy, CEO of Lotte Ventures Vietnam, said to TNGlobal that the figure of VND500 billion of Ho Chi Minh City’s venture fund is modest compared to actual market demand. 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. The figures are above Ho Chi Minh City fund’s initial capital of VND500 billion.
More importantly, domestic capital serves as a “vote of confidence” for international investors. Foreign funds often assess the level of local participation before committing capital, viewing it as an indicator of market validation and reduced risk, Pham Ngoc Huy highlighted.
With the initiation of Ho Chi Minh City, many local firms have announced their plans to contribute to the municipal venture capital fund, such as ride-hailing service Xanh SM pouring in VND30 billion, top conglomerate Vingroup with VND600 billion, investment management firm VinaCapital with VND10 billion.
Doan Hai Nam, Investment Director of ThinkZone Ventures. Source: ThinkZone Ventures
On the same page, Doan Hai Nam, Investment Director of ThinkZone Ventures fund, 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 ten years of sustained investment before generating revenue,” Nam noted. “That timeline exceeds the appetite of most private investors.”
According to Nam, 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.
At the same time, 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.
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, the executive 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 Hai Nam 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.