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Why Vietnam?  A potential AI hub in ASEAN

AI story 

When the Soviet Union launched the first human-made satellite Sputnik 1 into orbit in October 1957, it had an instant and profound effect on the American psyche and government policy. The event sparked widespread U.S. public anxiety about perceived Soviet technological superiority, with Americans following the satellite across the night sky and tuning in to Sputnik’s radio transmissions. It triggered the creation of the National Aeronautics and Space Administration (NASA), fueled major government subsidies for math and science education, and effectively launched the space race. That nationwide American mobilization bore fruit twelve years later when Neil Armstrong became the first person ever to set foot on the moon

AlphaGo scored its first high-profile victory in March 2016 during a five-game series against the legendary Korean player Lee Sedol, winning four to one. In May 2017, it continued to beat the Go champion – Ke Jie.

Machine learning—the umbrella term for the field that includes deep learning. Back in the mid-1950s, the pioneers of artificial intelligence set themselves an impossibly lofty but well-defined mission: to recreate human intelligence in a machine. That striking combination of the clarity of the goal and the complexity of the task would draw in some of the greatest minds in the emerging field of computer science: Marvin Minsky, John McCarthy, and Herbert Simon

Two camps: the “rule-based” approach and the “neural networks” approach. 

Researchers in the rule-based camp (also sometimes called “symbolic systems” or “expert systems”) attempted to teach computers to think by encoding a series of logical rules: If X, then Y. This approach worked well for simple and well-defined games (“toy problems”) but fell apart when the universe of possible choices or moves expanded.

The “neural networks” camp, however, took a different approach. Instead of trying to teach the computer the rules that had been mastered by a human brain, these practitioners tried to reconstruct the human brain itself.

During the 1950s and 1960s, early versions of artificial neural networks yielded promising results and plenty of hype. But then in 1969, researchers from the rule-based camp pushed back, convincing many in the field that neural networks were unreliable and limited in their use. The neural networks approach quickly went out of fashion, and AI plunged into one of its first “winters” during the 1970s. 

Current situation of AI in Vietnam:

Since 2014, AI has been included in the list of high-tech priorities for development investment in Vietnam. The Government has assigned the Ministry of Planning and Investment to develop a “National Strategy for the 4.0 Industrial Revolution”, identifying AI as one of the breakthrough and spearhead technologies that should be prioritized to focus on key groups. books to promote development. As a result, many national-level projects have been approved with the aim of bringing innovative and breakthrough technology ideas.

(Vietnam Law & Legal Forum 2021)

Major domestic technology corporations and innovative start-ups are accelerating their investments and making solid progress in AI research and application in many new business models. FPT, a well-known information technology services company in Vietnam, recently announced it will spend VND 300 billion ($13.16 million) on AI research and development over the next five years. This enterprise has invested in related research since 2013. Up to now, it has formed a diverse ecosystem of products, solutions and platforms to help other businesses optimize their operations and improve performance improvement, serving more than 14 million terminal users.

In an effort to realize the goal of becoming a national digital transformation leader, VNPT, a state-owned telecommunications enterprise, is promoting the development of AI technologies related to smart cities and e-government. Joining hands with localities, VNPT has deployed more than 30 intelligent operation and monitoring centers (IOCs) in provinces/cities nationwide, many of which have been put into operation.

Other technology corporations like Viettel, Vingroup are also spending heavily on AI research and development. To improve research capacity, Viettel and Vingroup have pioneered investments in supercomputer technology with the ability to perform over 20 million billion calculations per second to solve complex computational problems. While Vingroup focuses on technologies that apply AI in healthcare, smart cars and self-driving cars, Viettel focuses on investing in natural language processing technologies, converting Vietnamese voice and writing with high accuracy.

But not only large corporations are racing to AI, many Vietnamese startups or Vietnamese founders are also pursuing this field. Some have made their mark in the international market like ELSA Speak or Harrison-AI. Despite a sharp decrease from the previous year due to the impact of the COVID-19 pandemic, the investment capital in Vietnamese technology startups last year still reached more than 451 million USD, according to the Innovation and Public Investment Report. Technology Vietnam 2020. Many Vietnamese startups say that they have implemented or are considering implementing AI in their products in the future (Ministry of Industry and Trade of Vietnam 2021).

However, Vietnam’s AI has not really been developed to its full potential. Although AI is becoming an inevitable trend with great potential, the development of this field in Vietnam is facing significant challenges, such as limited human resources, data accuracy and firms’ access to capital.

Application of AI in Vietnam:

In recent years, a number of corporations, as well as the Government, have developed and applied artificial intelligence (AI) in a variety of industries, including education, telecommunications, retail, healthcare, and others, and have not only gradually controlled the market but also profited handsomely. The increase in the rate of AI adoption on a per-organization basis indicates rising interest in AI among businesses and industries. As reported, over 53% of surveyed organizations have put forth approximately $20 million each to invest in AI technology (VinAI 2022).

Some popular applications of AI in Vietnam are:

  • Fintech industry. Not only banks, Fintech companies are also very interested in investing in AI applications. Most companies and startups launch AI products or have partial AI applications, showing that AI is no longer a trend but the future of the economy. Most recently, on June 30, 2021, MoMo, a digital payment startup announced the completion of the acquisition of all intellectual property rights of Pique, a provider of AI solutions. MoMo’s representative said that it will continue to recruit to triple the number of AI personnel related to data and data science, in order to transform MoMo into a truly AI-first company. 

Previously, on June 25, 2021, Monfin application using AI algorithms to analyze user information and help these users better participate in financial and insurance products was officially launched. In December 2020, Zion Joint Stock Company (owner of Zalo Pay e-wallet) developed an AI product called Kiki for smart speakers after modeling the technologies of Siri (Apple) and Alexa (Amazon), etc. Along with IoT, the collection of data sources specific to each customer will help form a complete, up-to-date picture of customer needs. customer demand. When combined with AI solutions, fintech companies can fully proactively approach these changes in customer needs through the support of virtual assistants (Chatbots). Thus, in just an extremely short amount of time, possibly in seconds, fintech companies can give advice and recommendations that best suit customers’ needs or preferences right away. at the time they need it. This means that each customer will have a unique experience and receive advice tailored to their needs as quickly as possible. In addition, AI is a great tool to rank customer records, or recognize unusual transactions to help improve security more effectively for fintech (Bankingplus 2021).

  • E-commerce industry. AI solutions help sellers create an optimal journey for each customer, from the moment they have a shopping need to the time they complete the order. At some major e-commerce platforms like Lazada, based on data collected and analyzed by an AI-integrated tool, sellers can record appropriate offers based on age, gender, region. From there, they can recommend the most suitable products, come up with a reasonable business strategy, and know when is the right time to launch a “flash sale” offer. “golden hour”… to stimulate the shopping needs of customers. Not only eliciting demand, AI also supports sellers to “close orders” quickly with the CEM – customer interaction management feature. This is a special feature that helps to classify customer files into target groups. Sellers can actively access each file directly to encourage customers to complete the order; reviews of purchased products; suggesting new products or advertising promotions at the booth… thereby increasing revenue and brand recognition. In addition, AI now has another effect that is promoting the “Diderot effect” – a term that describes the tendency of users to buy additional things to complement the product they have just purchased. Taking advantage of this effect, AI helps sellers suggest products that go with the main item, contributing to increasing sales. Mr. Joris Kroese, CEO and founder of Hatch (an enterprise specializing in providing technology solutions for e-commerce), affirmed that in the next decade, AI will continue to be an important factor determining determine success in enhancing the customer’s shopping experience; and at the same time effectively support in increasing sales for brands and retailers (VnExpress 2021a).
  • Edtech industry. Currently, many educational institutions have been applying artificial intelligence (AI) to their management, renovating teaching methods and achieving initial results. Hong Bang International University has applied AI in face and voice recognition of students to serve for attendance purposes. FPT University even implements a deeper AI application when in addition to recognizing students’ faces, taking attendance, and managing students in the dormitory, the unit is also deploying AI in grading multiple-choice exams. Even more special is the research project “virtual teacher” applying ML (Machine learning) and AI (Artificial Intelligence) in Geography that teacher Le Van Anh and student Le Viet Dung (FPT High School) just announced, surprising many people by the efficiency and integration that AI brings. The “virtual teacher” will be used through two different, but linked areas: a chatbot and a video channel. Using chatbot will help users easily find information as well as ask questions related to the lesson for chatbot, users will get accurate information, in the shortest time (ETEP Vietnam 2020). 

By applying AI in education, we expect that the future education will be tailored to each student’s needs and own capacity rather than a general model that teachers are trying to target a whole group like now (Baodautu 2021). 

  • Medical industry: Since the COVID-19 pandemic broke out nearly three years ago, the application of AI in healthcare in Vietnam has become a bright spot in the AI development plan. During the pandemic, large telecommunications corporations such as Viettel and FPT developed AI-applied chatbots to automatically statisticize the epidemic situation in Vietnam in the form of a real-time map. The number of people hospitalized in isolation, the number of people being treated and recovered are also continuously updated. In addition, AI is also used in other applications such as Bluezone, NCOVI to help detect cases of infection or early contact and send it to the authorities, helping the health sector to monitor the disease and have a timely response plan (Suc khoe & Doi song 2021).

Besides the significant support of AI in dealing with the pandemic, AI is currently being applied in 4 areas: disease diagnosis, treatment, health monitoring, information management and training, according to Dr. Tran Thi Mai Oanh, Director of the Institute of Strategy, Ministry of Health (VnExpress 2021). Specifically in disease diagnosis, the VinDr system, developed by the Big Data Research Institute (VinBigData), applies AI in image diagnosis of lung diseases on chest X-ray images and breast cancer diagnosis on images, which has been tested at 3 major hospitals in Vietnam (108, Medical University; Vinmec). 115 People’s Hospital, 115 Gia An Hospital in Ho Chi Minh City and Phu Tho Provincial General Hospital are also the first 3 hospitals to apply AI in stroke diagnosis and treatment, allowing the emergency treatment to open from the previous 6 hours up to 24 hours which greatly improves the patient’s chances of survival. In short, AI applications help improve the quality and efficiency of medical examination and treatment, overcome medical risks and incidents, and reduce the load on hospitals. 

  • Tourism Industry: With the help of AI, the tourism industry also creates many attractive new products. Technology application helps tourism units reduce time, human resources and production costs, thereby reducing service costs. For example, Da Nang – a tourism hub in the central region has coordinated with the Hekate Technology JSC to develop and pilot the first automatic tourism information searching and support channel via text message conversation in Vietnam called Chatbot Danang Fantasticity. The app helps holidaymakers easily check information: famous destinations, events, weather, ATM locations, and hotlines, etc and helps turn Da Nang into the second city in Southeast Asia to apply chatbot to tourism (VietnamPlus 2022). Another interesting AI application in the tourism industry is the facial recognition technology developed by VinAI Research Institute of Artificial Intelligence. It is implemented in Vinpearl to help minimize waiting time for procedures and moving processes between internal areas (Times 2019).
  • Traffic: AI-supported traffic management projects were also initially applied in some metropolitan cities of Vietnam including Ha Noi, Ho Chi Minh City, Binh Duong, etc. One of the most noticeable AI applications in traffic is the Intelligent Transport System (ITS Solution) – a technology used to solve road traffic problems, including public security monitoring, traffic jam warning, current traffic violations, vehicle traffic counting system, etc. The system was first implemented in HCMC in 2019 with 5 main functions including Controlling the traffic signal system; Monitoring traffic situation; Providing online traffic information; Coordinating in handling violations of traffic order and safety, and Simulating traffic forecasting. In addition to the ITS Solution, Ho Chi Minh City also gradually builds a BMS solution, applying AI to improve efficiency in monitoring and managing the bus/route/passenger system. This solution package uses AI technology built on the foundation of technological solutions and devices such as information display LED panels at bus stations (bSmartLED), automatically analyze data and calculate the exact time the vehicle arrives at the pick-up/drop-off point (bSmartETA), digital map (bMap), navigation device (bGPS), AI Box device to help monitor passengers and drivers vehicle (bHub) and bus mapping software for passengers (ictvietnam.vn 2021).
  • Infrastructure: The most salient infrastructure project focusing on enhancing AI research and application is the Hoa Lac hi-tech park. With the scale of 1.586 ha and a total capital of 450 million USD, this park is expected to become a science city, a place that attracts investors in the research & development field; training and incubation; manufacturing hi-tech products in the fields: Biotechnology, Information – communication technology, New material technology and Automation technology (Hoa Lac Hi-Tech Park 2021).   

    Support for AI Development in Vietnam: 

In June 2021, the Prime Minister issued a national strategy on AI research, development and application until 2030. The strategy aims to “promote research, development and application of AI, making AI an important technology sector of Vietnam in the 4.0 Industrial Revolution”. Minister of Science and Technology Bui The Duy said the strategy targets that Vietnam will be among four leading countries in ASEAN and 50 nations globally in terms of AI research, development and application by 2030; build 10 prestigious AI trademarks in the region; and develop three national big data and high-performance computing centers (VietnamPlus 2021).

To promote research, development and application of AI, the Government of Vietnam has identified specific tasks and solutions to be implemented in the coming period as follows:

  • Develop and complete additional legal documents on intellectual property rights related to artificial intelligence.
  • Expanding projects to build community data in the form of the project of the Digital Vietnamese Knowledge System; connecting artificial intelligence and open science communities in Vietnam; supporting research mastery tasks, building domestic platforms for high-performance computing, cloud computing, fog computing; regularly organize activities to connect academic and research communities; professional community developing and applying artificial intelligence and data science at home and abroad.
  • Strongly deploying public-private partnership, co-financing training centers, research and development centers and artificial intelligence application centers; invest in forming a number of key research groups on artificial intelligence and data science in a number of universities and public research institutes; invest in facilities for a number of key data science and data science laboratories in universities and public research institutes; promoting the construction of a number of data science innovation centers, forming a number of Vietnamese brands in data science in the world.
  • Organizing basic research in data science, decoding technology, mastering technology, catching up with advances in data science, and initially contributing to data science method development new in a number of research institutions in mathematics and information technology; focus on investing in research and development of a number of artificial intelligence products based on data sources and specific knowledge of Vietnam; implementing a national key research program on artificial intelligence associated with graduate student training; deploying research and development of a number of important artificial intelligence product and service delivery platforms such as natural language processing, computer vision, automated processes, artificial intelligence technologies based on on data, robotics and practice vehicles, in some data-ready fields,
  • Promote the formation of open professional groups in the fields, allowing to shorten the time to complete research results; promote the sharing, sharing, openness of data, technology and application of artificial intelligence in a multi-disciplinary, interdisciplinary and cross-sectoral direction to accelerate the formation of results and improve output efficiency of research and development activities in other fields; extensive training of open platforms on data and artificial intelligence applications; promoting open source communities and forums on artificial intelligence; encourage enterprises to order research institutes and universities to research and develop specific artificial intelligence products of Vietnam.
  • Organizing events on artificial intelligence; support domestic individuals and organizations to participate in international seminars, exhibitions and competitions on artificial intelligence; participate in organizing and implementing bilateral and multilateral scientific research cooperation programs and projects on artificial intelligence; Promote the development of artificial intelligence research cooperation facilities and centers; cooperation projects on technology transfer, exploitation of inventions and industrial property rights between Vietnamese enterprises and foreign enterprises in artificial intelligence; high-quality artificial intelligence training centers and programs serving domestic and global markets; exchange of experts, researchers, students of Vietnamese organizations and enterprises with foreign research and training organizations and artificial intelligence enterprises. 

As a result of the State’s specific strategy for investing in AI, for the first time, Vietnam’s AI readiness score (51.82 out of 100) exceeds the global average (47.72). Vietnam rose 14 places last year in a global ranking for AI readiness to 62nd out of 160 countries and territories and rose one spot to sixth among ASEAN member nations (VnExpress 2022). 

Challenges:

(rubikAI & Nexus Frontier Tech 2018)

According to a research conducted by Nexus FrontierTech, rubikAI and G&H Ventures in 2018, the three biggest challenges with the development of artificial intelligence (AI) technology in Vietnam are talent shortage (59%), followed by limited data access (47%) and fundraising (35%) (rubikAI & Nexus Frontier Tech 2018).

Talent shortage. It is quite understandable because In the AI ​​race, human resources are the decisive factor. Not only Vietnamese companies compete for the best Vietnamese AI engineers and researchers, but also international corporations and the world’s leading AI companies want to take advantage of this elite force. The participation of these companies is a good sign. It has created a momentum, attracting Vietnamese AI experts and engineers from all over the world. Regular seminars with the participation of foreign experts are helping to gradually form AI communities in the country (Ministry of Industry and Trade of Vietnam 2021).

Despite the thirst for talent in AI, the training of professional AI human resources in Vietnam is still weak and lacking. The main source of educating and providing high-quality AI human resources – Universities have claimed to encounter enormous difficulties in designing good enough Artificial Intelligence training programs. The first difficulty is the lack of lecturers – who have the experience and ability to design lectures that meet international standards with up-to-date and methodical content in both theory and practice. The second difficulty is that research groups in universities are lacking the minimal computational tools that allow them to develop and practice AI algorithms. According to Dr. Nguyen Phi Le – Executive Director of BK.AI Center under the University of Information and Communication Technology, “The AI ​​industry requires a dedicated computer and server system with GPU graphics cards worth hundreds of millions of dong, usually only large enterprises can afford to invest.” (DNHN 2021)

Although universities are accelerating, they have even signed cooperation agreements with major technology partners from Korea, Japan, the US, Australia, etc in order to open international AI research centers in Vietnam, the speed and quality of training is also considered “difficult to keep up with demand” because the number of universities that actually train well in this field is only counted. on fingertips as well as the aforementioned entry barriers to access AI in Vietnamese universities.

The lack of human resources in the AI industry is so severe that even training IT human resources, which is considered an “outside” for the development and application of new digital technologies, is still short of 100,000-200,000 people per year. According to the report of Nexus FrontierTech in 2019, Vietnam’s AI human resources currently only meet 1/10 of the market demand. In an AI talk at the end of 2020, Prof. Ho Tu Bao, an expert in research and consulting on AI implementation in Vietnam, said that in fact, the number of human resources to understand algorithms and create AI tools only accounts for 2-3%, while the majority of 70-80% are those who use that tool to apply in professional fields (finance, insurance, healthcare, information, manufacturing, manufacturing, retail, services…).

Limited data access. An important obstacle that Vietnam needs to overcome is building data and computing infrastructure. AI is a data-driven field, therefore, without good and regularly updated data, we will be at a dead end. Meanwhile, the computing infrastructure that is the “machine” for AI to run is also very important, because as the speed of AI development and application increases, the amount of computation and resources for computation must also increase accordingly.

Vietnam’s data and computing infrastructure is still in its infancy. Vietnam does not have many good quality datasets; The data is often fragmented, less connected and limited in terms of access. Talking about the AI ​​Strategy, Deputy Minister of Science and Technology Bui The Duy affirmed that in order to well implement the set goals, Vietnam needs to quickly form a culture of data sharing and open access.

The Government of Vietnam’s efforts to promote data sharing and centralization have been demonstrated through the launch of the National Data Portal (data.gov.vn) to share data from ministries, sectors and localities; as well as establishing a digitized Vietnamese Knowledge System to collect data from the community, label and preprocess that data to apply for artificial intelligence.

However, for AI to be researched and applied more widely, the culture of sharing, connecting and opening needs to spread to the whole business sector. Vingroup is pioneering when opening a dataset of 18,000 X-ray images collected and labeled by reputable radiologists. Soon, they open-sourced the labeling software so that research groups or startups can quickly develop their own math problems on medical AI. According to the technology development communities, such willingness to share data is valuable and should strengthen across more areas.

Fundraising. According to the AI landscape report of rubikAI (2018), AI businesses also face many difficulties when starting a business, with 59% of companies established under 2 years and only 34% raising more than $ 200,000 in capital from outside.

Most AI companies are still in the early stages, so the scale is relatively small, accounting for 68% of companies with less than 50 employees and 70% of companies with less than 10 AI engineers. Therefore, corporations and venture capital investors are important partners that can support in terms of capital, access to big data as well as market access.

AI popular startups/companies in Vietnam:

According to Mr. Nguyen Chi Dung – Head of Ministry of Planning and Investment Vietnam, AI has strongly developed. In 2018, the AI industry increased more than 70% compared to 2017 equalling to approximately USD 200 billion. AI has the potential to become the most disruptive and breakthrough technology within the next 10 years and we need to further promote its potential (VietnamCredit 2021).  

Some of the most AI popular startups/companies in Vietnam are (Tracxn 2022; TPS 2022):

VNLIFE

VNLIFE is an omnichannel banking and distribution software solution. It provides banks with technologies that allow them to deliver digital banking services to their consumers. It implements digital banking channels, payments, and solutions for travel and retail organizations using a variety of technologies such as AI, blockchain, IoT, and big data.

FPT AI

FPT AI is a subsidiary of FPT Software, a renowned worldwide technology, outsourcing, and IT services company based in Vietnam. The FPT.AI Artificial Intelligence Platform, developed by a team of top AI developers and specialists at FPT, offers tools to assist organizations to automate repetitive and sophisticated processes, improve operations, and deliver better customer service.

Zalo AI

Zalo AI is a subsidiary of Zalo, one of Vietnam’s largest tech firms. With an emphasis on Computer Vision, Speech Processing, Natural Language Processing, and Data Mining, the company has competence in virtual assistants and data analysis. Zalo AI has a huge database of 60 million active users in Vietnam thanks to social network Zalo. This gives them a huge advantage in developing and improving AI products and services.

VinAI

VinAI Research is a renowned research institute in Vietnam, with offices in Hanoi and Ho Chi Minh City. Its objective is to undertake high-impact research that pushes the knowledge frontier in AI and to expedite AI applications in Vietnam, the Asia Pacific region, and beyond. It is funded by VinGroup, Vietnam’s largest corporation by capitalization.

GRDAI – VNG

GRDAI R&D Department is funded by VNG Joint Stock Company. Founded in 2018 with the purpose of creating high-applicability artificial intelligence solutions. GRDAI’s products have received numerous honors in artificial intelligence competitions such as the Vietnam AI Grand Challenge and the National Grand Finale 2019.

Casting Asia

CastingAsia Platform, CastingAsia Marketplace, and CastingAsia Engagement are the 3 primary services offered by this firm, which was founded with the goal of offering data-driven insights to influencers. It’s all about ensuring that brands and influencers can market in a smart and secure manner.

DropDeck

Drop Deck ranks and evaluates all startups using AI algorithms. It earned recognition and support from world-class AI professionals as part of the IBM Watson AI Xprize competition.

Sero.ai

Sero.ai is a crop intelligence firm that uses full-cycle data analytics to optimize rice production. Sero.ai uses mobile internet to link farmers and agricultural specialists. Using photographs, the company monitors crop health and finds pests nearly quickly.

TINYpulse

Tinypulse was built to assist firms enhance employment retention by using NLP (neuro-linguistic programming) and sentiment analysis. Puget Sound magazine named the company one of the greatest places to work in 2017.

Sentifi

Sentifi, a Swiss fintech business, is a global leader in Crowd-Intelligence for financial markets. Sentifi’s big data and AI-based technology provides insightful research, allowing millions of investors to make smarter investment decisions by being better informed. Sentifi has won the Swiss FinTech Award for 2016.

Reference list

Bankingplus 2021, AI tăng sức mạnh cho các Fintech, Thời Báo Ngân Hàng.

Baodautu 2021, Ứng dụng rộng rãi trí tuệ nhân tạo trong giáo dục, baodautu, viewed 29 April 2022, <https://baodautu.vn/ung-dung-rong-rai-tri-tue-nhan-tao-trong-giao-duc-d154106.html>.

DNHN 2021, Những khó khăn trong việc đào tạo nhân lực AI tại Việt Nam, Tạp chí Doanhnghiephoinhap.vn – Cơ quan ngôn luận của hiệp hội Doanh nghiệp Vừa và nhỏ Việt Nam, viewed 25 April 2022, <https://doanhnghiephoinhap.vn/nhung-kho-khan-trong-viec-dao-tao-nhan-luc-ai-tai-viet-nam.html>.

ETEP Vietnam 2020, Đưa trí tuệ nhân tạo hỗ trợ giảng dạy: Xu hướng làm thay đổi phương thức giáo dục, etep.moet.gov.vn, viewed 29 April 2022, <https://etep.moet.gov.vn/tintuc/chitiet?Id=1258>.

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ictvietnam.vn 2021, Ứng dụng AI trong quản lý giao thông thông minh, ictvietnam.vn, viewed 25 April 2022, <https://ictvietnam.vn/ung-dung-ai-trong-quan-ly-giao-thong-thong-minh-20211207185216961.htm>.

Ministry of Industry and Trade of Vietnam 2021, Việt Nam đẩy mạnh đầu tư vào trí tuệ nhân tạo, Moit.gov.vn, viewed 25 April 2022, <https://moit.gov.vn/tin-tuc/phat-trien-cong-nghiep/viet-nam-day-manh-dau-tu-vao-tri-tue-nhan-tao.html>.

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― 2022, AI application proves useful to improving tourists’ experience | Sci-Tech | Vietnam+ (VietnamPlus), VietnamPlus, viewed 25 April 2022, <https://en.vietnamplus.vn/ai-application-proves-useful-to-improving-tourists-experience/222478.vnp>.

VinAI 2022, How artificial intelligence is the key to unlock the future of humanity, VinAI, viewed 29 April 2022, <https://www.vinai.io/how-artificial-intelligence-is-the-key-to-unlock-the-future-of-humanity/>.

VnExpress 2021a, AI thay đổi trải nghiệm mua sắm online ra sao – VnExpress, vnexpress.net, viewed 29 April 2022, <https://vnexpress.net/ai-thay-doi-trai-nghiem-mua-sam-online-ra-sao-4336304.html>.

― 2021b, Việt Nam có lợi thế ứng dụng AI trong y tế, vnexpress.net, viewed 25 April 2022, <https://vnexpress.net/viet-nam-co-loi-the-ung-dung-ai-trong-y-te-4165932-tong-thuat.html>.

― 2022, Vietnam climbs 14 places in AI readiness ranking – VnExpress International, VnExpress International – Latest news, business, travel and analysis from Vietnam, viewed 25 April 2022, <https://e.vnexpress.net/news/news/vietnam-climbs-14-places-in-ai-readiness-ranking-4428352.html>.

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Capture Vietnam’s investment landscape in 2021

Vietnam is expected to become the third largest startup and innovation hub in Southeast Asia, only after Singapore and Indonesia in 2022, according to the Southeast Asia Startup Ecosystem 2.0 report by Golden Gate Ventures. This projection is relevant to the current investment landscape of Vietnam when 2021 witnessed a lion’s share of capital (over $1.3 billion) poured into the startup ecosystem which is fourfold compared to the 2020’s figure. The 5 sectors that attract the most amount of funds are Fintech, E-commerce, Edtech, Medtech and SaaS. This article aims to give an overview of the Investment landscape in Vietnam, current attractive sectors, as well as what investors should expect in 2022 and the drivers of that.

I. OVERVIEW OF VIETNAM’S INVESTMENT LANDSCAPE

According to the National Agency for Technology Entrepreneurship and Commercialization Development, Vietnamese startups attracted investments of over $1.3 billion in 2021, four times the previous year’s figure.

Figure 1: Investment in Vietnam startups 2021 (Reproduced from VNExpress 2021)

Currently, there are over 3,800 startups in Vietnam’s startup ecosystem, including 4 unicorns (VNG, VNLife, MoMo, Sky Mavis), 11 valued at more than $100 million startups (Tiki, Topica Edtech…) (Nextrans 2021).

Deal by Type:

According to the Vietnam Industry Report by Nextrans 2021, the most popular deal types are Seed (42.3%), Series A (19.6%) and Pre-seed (13.4%) with capital value ranging from $500,000 to $3 million. Although higher value deals like series C, D, E only account for 4.1% of the total deal amount in 2021, they are expected to increase in 2022 showing the potential of Vietnamese startups to boom in the upcoming years.

Figure 2: Investment Deals by Type (Reproduced from Nextrans 2021)

Deals by Investor Country:

Vietnam’s start-up market is also the preferred destination for 208 active venture capital funds, of which there are nearly 40 domestic investment funds. Active funds from both local and foreign ventures in the market include VSV Capital – Nextrans, Vietnam Silicon Valley, Mekong Capital, 500 Start-up Vietnam, Vietnam Investment Group, IDG Ventures Vietnam, Do Ventures and Genesia Ventures. 

Looking at all deals recorded in 2021, it can be clearly seen that foreign venture capitals are more active than local ones with 5 most notable deals of the year 2021 (Tiki, VNLife, Momo, SkyMavis, EQuest) belong to foreign investors. The deal records also show the transition in the 3 top active countries investing in Vietnam. In 2020, Korea was ranked with the highest investment in Vietnam, followed by Singapore and Japan respectively (Do Venture 2020). However, in 2021, Singapore took the lead in investment; Korea lowered itself at 2nd position, and 3rd position belonged to Japan.

Local ventures and enterprises do have some good deals, just not as valuable as the ones made by foreign investors. 3 most notable investment deals made by local ventures or enterprises are: VNG with 22.5 mil USD of investment into Telio, Mekong Enterprise Fund IV with 10 mil USD into Rever and the third place belongs to the shared deal led by Genesia Ventures with the participation of JAFCO Asia, Trihill Capital and former Affirm (Xffirmers) senior manager Pham Le Nhat Quang, as well as from current investors including 1982 Ventures, Zone Startups Ventures and other angel investors that invested $1.8 million into Fundiin (CafeBiz 2021). 

Figure 3: Startups with biggest funding in 2021 (Reproduced from VnExpress 2021)

According to Pham Hong Quat – Head of the National Agency for Technology Entrepreneurship and Commercialisation Development, Vietnamese startups currently depend too much on foreign capital (VNA 2022). Data shows that investment in Vietnamese startups hit a record high of over 1.3 billion USD in 2021 and a majority of the funding came from foreign ventures. On an annual basis, only about 100 out of 3800 startups were able to raise funds. Domestic resources, though abundant, have not been unleashed, Quat said, urging that Vietnamese high-performing corporations will better engage in innovation and tech startup projects in the country. 

Deals by Industry/Sector:

In 2021, five most funded sectors are Fintech (26.6%), E-commerce (20.3%), Edtech (17.2%), Medtech (7.8%) and SaaS (6.3%). By number of deals, Fintech is the leading industry with 26,6% of total deal count belonging to Fintech sectors like digital payment, personal finance, POS, SMEs financing,… as well as having 2 out of 4 current unicorns in the Fintech field.

Figure 4: Investment Deals by Industries 2021 (Reproduced from Nextrans 2021)

II. OVERVIEW OF LEADING SECTORS IN 2021 

According to a report by Nextrans (2021), with the investment landscape of 2021, it can be observed that the 5 most dominant and leading sectors of the whole economy are Fintech, E-commerce, Edtech. Healthcare and Software as a service (Saas). If you want to know more about each segment including the Market overview, Current players in the segment, Opportunities and Challenges faced by each segment, etc, you can read the series of Why Vietnam articles published on InnoLab Asia. 

Fintech

Growth drivers for the Fintech sector are: a large percentage of potential tech savvy users, a positive start-up investment and community, an increasingly supportive legal framework, and a strong enabling environment. Besides, Fintech also benefits from the growth of retail or E-commerce when consumers begin to favor digital payments (Google, Temasek & Bain 2021).

Market overview

  • Compared to other SEA nations, in 2021, Vietnam ranked 3rd (11%) in total deal value and ranked 4th in deal count. From only 39 startups in 2015, the number increased substantially to up to more than 150 companies in 2021, which shows the potential of the field. 
  • Digital payment segment still accounts for the largest share in the Fintech sector. However, P2P lending and Crypto/Blockchain are the two rising stars with the strongest growth. 
  • 3 most notable startup deals in the Fintech segment are Momo, VNPAY, Infina.

E-commerce

Growth drivers for the Fintech sector are the fast-growing internet economy, increased online purchases, and favorable government legislation. COVID-19 pandemic is the accelerator for this expansion of E-commerce. 

Market overview

  • In ASEAN, Vietnam is amongst the top three countries for highest retail growth, behind only Indonesia. The e-commerce sales of Vietnam is predicted to expand by 80% year over year and fivefold in the next 5 years. Vietnam also has the largest expected growth in online retail GMV among Southeast Asian countries, at 4.5x between 2021 and 2026, while total SEA GMV is expected to quadruple in the following 5 years.
  • B2C is a concentrated segment with 86% belonging to 3 top E-commerce platforms: Shopee, Lazada and Tiki. Hence, the B2B market emerges as a more potential market to enter for most startups (including 2 of the 3 most notable deals – Telio and Kilo)
  • 3 most notable startup deals in the E-commerce industry are Tiki, Telio and Kilo.

Edtech

Growth drivers for Edtech are: a rapidly growing young middle class, a high priority for education, and the proactiveness of the Government in attracting foreign investment. COVID-19 pandemic is the accelerator for this expansion of Edtech. 

Market Overview

  • Young middle class: There are 24 million pupils and students in Vietnam, more than 90% of these use mobile phones, computers, or laptops to study and quickly catch up with new technology trends. Besides, the young labor force always actively reskill and upskill themselves in order to meet the requirements of the job market. 
  • High priority for education: According to Bain & Company, the average Vietnamese family spends about 20% of their  disposable income on education for their children, compared with 6-15% in other Southeast Asian countries. 
  • Proactiveness of the Government: The Vietnamese government also supports Edtech with a long-term orientation for education: In July 2021, the Vietnamese government set a target of bringing online training to 90% of universities and 80% of high schools and vocational institutions by 2030.
  • 4 segments in Edtech are: content (pre-recorded lessons in the form of videos or exam banks); live-class (online class with a teacher, can be one-on-one or in groups); OMO (model online combined offline); B2B (process management solution for schools or educational institutions). In the first stage, Vietnam’s edtech market started from content and is starting to move into the live-class segment (Bao Dau Tu 2021). According to statistics of Tracxn 2019 organization, there are currently 109 startup organizations operating in the Edtech market with different segmented objects in Vietnam.
  • 3 most notable startup deals in the EdTech sector are EQuest, ELSA, and Coderschool. (Dan Tri 2021). 

Medtech

Although currently being at the early stage of development, we could certainly expect a leapfrogging pace of growth for Medtech in the near future. Growth drivers for Medtech are: rapid change in  demand for healthcare services, positive support from the Government and the outstanding impacts technology could bring in to alleviate current problems in conventional healthcare markets.

Market Overview:

  • Health expenditure in Vietnam amounted to $15.4 billion in 2020, equivalent to 5.7% of total GDP in which the public sector plays a prominent role regarding both overall healthcare expenditure (accounting for 56.7% in 2020) and the scale of infrastructure.
  • Healthcare startups are gradually becoming a topic of interest and priority, especially for the Digital Health market. 4 main segments within the Medtech industry are: Health Information Technology, Telemedicine, Consumer Health Electronics, and Healthcare Big Data & AI-based products and services. Currently, these areas are in the early stages of development.
  • 3 most notable startup deals in the Medtech sector are BuyMed, eDoctor, and Med247.

SaaS

Growth drivers for SaaS are the long-term strategic direction of the Government, a favorable legal corridor, positive indicators for the digital economy, and most importantly a change in the perception of businesses about the urgency of digital transformation, making it definitely become one of the most attractive areas for investors in 2022.

Market Overview

  • From little awareness of Saas (Software as a service) in 2019, from 2020 until now, the COVID-19 has triggered a significant increase in the attention of investors for the SaaS sector in Vietnam as the demand for digital transformation rises.
  • Factors contributing to SaaS growth are the needs for Work-from-home/safety measures, the needs for digital application in business operations. Additionally, favorable conditions to promote the digital transformation are created by the Vietnam Government, notably the National Digital Transformation Program by 2025 with an orientation towards 2030. 
  • There are 474 SaaS startups in Vietnam, and 2 most notable startup deals in the SaaS sector are Bizzi, and EI Industrial. Other “highlight” SaaS platforms are Base.vn – acquired by FPT and SlimCRM – the top finalists of software solutions in the category of Best SaaS Product for Small Business/SMEs.

In 2022, it is expected that the five above industries will continue to catch investors’ attention in Vietnam, including Fintech, E-commerce, Edtech, Medtech and SaaS. For investors looking for a bigger investment picture in SEA’s economy in 2021, 5 leading sectors are E-commerce, Online media, Online travel, Transport & Food and Financial service in addition to 2 nascent sectors that have accelerated rapidly due to COVID-19 including Edtech and Medtech (Google, Temasek and Bain & Co. 2021)

III. DRIVERS FOR VIETNAM’S STARTUP ECOSYSTEM

The drivers of Vietnam’s emergence as a startup hub in Southeast Asia come from the consumers of Vietnam – a developing country and from the startups and investors themselves. These include:

FROM THE CONSUMERS:

  • Rising consumer spending on essential goods like food, health, etc. and online-buying: Consumer Price Index 2020 – 168.6 (2010=100) (The World Bank Data n.d.). In Vietnam, according to the 2021 E-Commerce White Paper, the percentage of Internet users participating in online shopping has increased from 77% in 2019 to 88% in 2020.
  • A young intellectual population: Vietnam is in the period of a golden population with a large workforce, rapidly absorbing the world’s development progress, however, the population aging rate increases and the population (State Management Review 2020). Specifically, the labor force aged 15 and over is 50.5 million people –  Employees aged 15 and over are 49 million people (General Statistics Office of Vietnam 2021). In terms of age group, the youth group in the age group of 25-30 years old always accounted for the highest proportion and increased fastest (41.4% in 2015 to 45.0% in 2018). While the group of young people aged 20-24 years old tended to decrease slightly in the period 2015 – 2018 (35.6% in 2015 to 32.7% in 2018), the group of young people aged 16-19 tended to decrease. a strong downward trend (23.0% in 2015 to 22.3% in 2018). 
  • High internet coverage: There are 68.72 million internet users in Vietnam, and 154.4 million mobile connections in Vietnam in January 2021 (Datareportal 2021). Internet penetration in Vietnam reached 70.3%. Remarkably, the 4G network has covered 99.8% of the country. Meanwhile, the 5G network has been commercially tested by Viettel, VNPT and MobiFone operators in 16 provinces and cities, including Hanoi, Ho Chi Minh City, Bac Ninh, Bac Giang, Binh Phuoc, Da Nang, Thua Thien Hue, Hai Phong, Quang Ninh, Vinh Phuc, Dong Nai, Thai Nguyen, Can Tho, Binh Duong, Ben Tre, Ba Ria – Vung Tau. Vietnam aims to commercialize 5G by 2022, promote smartphone use and reduce the number of 2G phones to less than 5% (VNExpress 2021).

FROM THE STARTUP ECOSYSTEM:

  • Revenue growth in digital sectors such as Fintech and E-commerce
  • Increasing interest from foreign investment funds – particularly Japanese, Singaporean, and South Korean VC funds – and targeted government support.

Also, with the clear economy strategy from the Government, it is expected to see a prospected increase in the amount of money invested in Vietnam in 2022

In the last months of 2021, the socio-economic situation continues to have many positive changes, the economy prospers clearly, strengthening the confidence of people, businesses, friends and international partners. According to the resolution of the National Assembly, the Government has set tasks for 2022, in which the GDP growth rate should reach 6-6.5%; GDP per capita reached 3,900 USD; disbursing 100% of the public investment capital plan… National and international economic experts assessed that this task is completely feasible. Vietnam is among the countries with the highest vaccine coverage in the world. In addition, there is a policy of safe, flexible adaptation and effective disease control. These are considered important foundations for a quick economic recovery.

Forecasting Vietnam’s economic growth in 2022, the Asian Development Bank (ADB) forecasts at 6.5%. ADB believes that exports will continue to be a growth engine with effective use of free trade agreements. Meanwhile, London-based HSBC said that Vietnam’s economy could regain its GDP growth rate of 6.8% in 2022, mainly thanks to strong foreign investment again, focusing much into the field of green production and development.

Thanks to the resilience towards disturbance, sustained growth even in difficult times, promising economic recovery prospects, and the favorable consumption patterns, the amount of money invested is expected to grow in 2022 from both local and foreign investors.

REFERENCE LIST

Bao Dau Tu 2021, Lĩnh vực công nghệ giáo dục (edtech): Chờ ngày ‘cất cánh’, baodautu, viewed 8 March 2022, <https://baodautu.vn/linh-vuc-cong-nghe-giao-duc-edtech-cho-ngay-cat-canh-d152289.html>

CafeBiz 2021, Startup ‘mua ngay, trả sau’ Fundiin huy động thành công 1,8 triệu USD ở vòng hạt giống được dẫn dắt bởi Genesia Ventures, cafebiz.vn, viewed 21 March 2022, <https://cafebiz.vn/startup-mua-ngay-tra-sau-fundiin-huy-dong-thanh-cong-18-trieu-usd-o-vong-hat-giong-duoc-dan-dat-boi-genesia-ventures-20210913223843168.chn>. 

Dantri 2021, Nhiều startup công nghệ giáo dục Việt ‘hút’ mạnh vốn đầu tư, Báo điện tử Dân Trí, viewed 13 February 2022, <https://dantri.com.vn/kinh-doanh/nhieu-startup-cong-nghe-giao-duc-viet-hut-manh-von-dau-tu-20211004080809726.htm>.

Datareportal 2021, Digital in Vietnam: All the Statistics You Need in 2021, DataReportal – Global Digital Insights, viewed 13 February 2022, <https://datareportal.com/reports/digital-2021-vietnam#:~:text=There%20were%2068.72%20million%20internet>.

Do Ventures 2021, Vietnam Innovation & Tech Investment Report 2020, viewed 2 October 2022, <https://doventures.vc/assets/uploads/reports/download/vietnam-innovation-and-tech-investment-report-fy2020-1624893687.pdf>.

General Statistics Office of Vietnam 2021, Press conference to announce socio-economic statistics in the fourth quarter and 2021, General Statistics Office of Vietnam, viewed 14 February 2022, <https://www.gso.gov.vn/en/data-and-statistics/2022/01/press-conference-to-announce-socio-economic-statistics-in-the-fourth-quarter-and-2021/>.

Golden Gate Ventures 2021, SEA Startup Ecosystem 2.0, Golden Gate Ventures.

Google, Temasek and Bain & Company 2021, e-Conomy SEA 2021 report: Roaring 20s: the SEA Digital Decade, services.google.com, viewed 14 March 2022, <https://services.google.com/fh/files/misc/e_conomy_sea_2021_report.pdf>. 

Government Electronic Newspaper 2021, ‘Chuyển Đổi Số Quốc Gia Năm 2022: Quyết Tâm Thực Hiện Các Nhiệm Vụ Để Tạo Bước Đột Phá’, baochinhphu.vn, 10 December, viewed 10 February 2022, <https://baochinhphu.vn/chuyen-doi-so-quoc-gia-nam-2022-quyet-tam-thuc-hien-cac-nhiem-vu-de-tao-buoc-dot-pha-102305326.htm>.

MPI 2021, ‘Ministry of Planning and Investment Portal’, www.mpi.gov.vn, viewed 9 February 2022, <https://www.mpi.gov.vn/en/Pages/tinbai.aspx?idTin=52018>.

Nextrans Vietnam 2021, Vietnam Industry Report 2021, Nextrans Vietnam.

State Management Review 2020, ‘Dân số trong độ tuổi thanh niên ở Việt Nam – Những vấn đề đặt ra’, Quanlynhanuoc.vn, viewed 10 February 2022, <https://www.quanlynhanuoc.vn/2020/12/22/dan-so-trong-do-tuoi-thanh-nien-o-viet-nam-nhung-van-de-dat-ra>.

TopDev 2020, Thị trường cung cấp dịch vụ SaaS 2020 |Báo cáo Landscape 2020, TopDev, viewed 13 February 2022, <https://topdev.vn/blog/thi-truong-cung-cap-dich-vu-saas-landscape-2020/>.

TechFest Vietnam 2021, SlimCRM lọt top các giải pháp tại chung kết SaaS Awards 2021, techfest.vn, viewed 13 February 2022, <https://techfest.vn/tin-tuc/slimcrm-lot-top-cac-giai-phap-tai-chung-ket-saas-awards-2021>.

The World Bank Data n.d., Consumer price index (2010 = 100) – Vietnam | Data, data.worldbank.org, viewed 14 February 2022, <https://data.worldbank.org/indicator/FP.CPI.TOTL?end=2020&locations=VN&start=2018&view=chart>.

VNExpress 2021, ‘Vietnamese startups draw $1.3 bln worth of investments in 2021 – VnExpress International’, VnExpress International, 31 December, viewed 10 February 2022, <https://e.vnexpress.net/news/business/data-speaks/vietnamese-startups-draw-1-3-bln-worth-of-investments-in-2021-4410036.html>.

VNA 2022, ‘Domestic Firms Urged to Engage More in Vietnamese Startups | Business | Vietnam+ (VietnamPlus)’, VietnamPlus, 11 January, viewed 10 February 2022, <https://en.vietnamplus.vn/domestic-firms-urged-to-engage-more-in-vietnamese-startups/220513.vnp>.

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FIRST CROWDPITCH VIETNAM 2019: TRAVEL STARTUPS ARISE, WHILE ENVIRONMENTAL ONE DRAW MORE ATTENTION

I reposted the content of some events that my company ran in order to spread the message further.  In the 1st CrowdPitch Vietnam 2019, 5 Vietnamese startups had presented their ideas, learned from expert mentors in the ecosystem and gained exposure, as well as built and engaged with the community.

Mr. Thang Huynh – CEO & Co-Founder Innovation Lab

Most-voted: Saving environment solution

Vietnam is one of the worst polluters of ocean plastic waste in Asia and the globe, with 13 million tonnes of waste released to the ocean every year. Fortunately, Vietnamese starts to get aware of this massive pollution and therefore, green initiatives emerge. Obviously, eco-minded entrepreneurs in Vietnam are not out of the picture.

Ms. Linh Le – Founder & CEO AYACUP

Startup AYA – REUSABLE CUP with the plastic waste solution was the most-voted idea in 1st CrowdPitch Vietnam 2019. AYA REUSABLE CUPS creates convenience idea for users which enable them to use and return the cup rather than throwing single-use plastic cup.  More specifically, with AYA you can request an eco-friendly cup at any participating coffee shop or smoothie bar with your ID code. With the so-called “Life Time Membership Pass”, you also can drop the AYACUP at any participating locations. AYA has achieved 85 vendors, 135 locations and 5,495 plastic cups saved.

Linh Le, Founder of AYA Reusable cups shared that she was very surprised and happy when people were very interested in her project and concerned about the environment. It is a good sign that more people want to change their habits to protect the environment.

According to the report 2018 by UN Environment, one million plastic drinking bottles are purchased every minute around the world; up to 5 trillion single-use plastic bags are used worldwide every year. In total, half of all plastic produced is designed to be used only once – and then thrown away.

Mr. Tuan Tran – Founder Airiot VietNam

With the same mission to save the environment; startup Airiot VietNam provides solutions to save energy for Airbnb hosts by a self-designed device. With IOT device working based on Bluetooth low energy 4.0, Airiot helps Airbnb hosts to turn off the air-conditioner automatically when people are not in the accommodation.

Travel tech – Top trendy startups in Vietnam

According to a report recently released by Topica Founder Institute (TFI), eight major travel tech deals worth $64 million were signed last year. The travel tech market is full of potential as increasing numbers of Vietnamese seek to travel and enjoy life.

The trend was well demonstrated in May section of CrowdPitch Vietnam as 3 out of 5 start-up ideas is technology-based travel startups including LandedVibe, Gody.vn and CheepCheep.

Mr. Le Duy Hoang – Founder LandedVibe

Becoming the winner chosen by judges, LandedVibe offers a platform for diversified offline skill-sharing and entertainment activities. They build a network where anyone can turn shareable values of their profession, skill or hobby into payable activities for locals, expats and travelers alike to book, via a sharing-economy platform.

Explained about the decision, Mr. Bobby Liu – CrowdPitch Vietnam judge and Co-director of Topica Founder Institute said: “LandedVibe will change the way of travel a lot. It is about the experience, about travelers getting and sharing their own experience. It could be popular with young travelers. Because of that, LandedVibe has development potential and will attract investors.”

Mr. Pham Viet Anh – CEO & Founder CheepCheep

Ms. Ngoc Anh – Founder Gody.vn

Other startups are CheepCheep, an online platform to book attraction tickets through a hundred places in Vietnam, and Gody.vn, a social travel platform to personalize trips based on AI’s recommendations.

2019 CrowdPitch Vietnam is an initiative for startups to raise their brand awareness, identify their market, attract potential investors and engage actively with future customers.

5 startups chosen to pitch each month will receive 1.000USD AWS credits, technical support, and free online training besides the voting cash by audiences’ entrance tickets.

Mr. Bobby Liu emphasized the prominence of CrowdPitch to startups in the ecosystem because of its benefit and recalled himself as a winner of this kind of crowdpitch five years ago.

From the participant’s perspective, Founder of AYA, Linh Le claimed that pitching in CrowdPitch was a valuable opportunity for early-stage startups to validate their idea and cheer them up. “It is also a good place for them to interact with other startups and investors,” Linh said and personally, CrowdPitch made her more confident, gave her great feedback from other entrepreneurs, and connected her with the community.

The 2nd CrowdPitch Vietnam 2019 is going to present on June, 26th 2019.

The CrowdPitch Vietnam is powered by Innovation Lab.

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Keep an eye out for the Vietnam startup ecosystem and its potential for growth

Vietnamese attitudes towards technology and its potential are very positive

Expansion beyond big cities

Vietnam has been the fastest-growing middle class in Southeast Asia in recent years. However, the development is noticeable: the number of startups has increased — four times from 400 in 2012 to 1,800 in 2015, and nearly 3,000 in 2017. And it is also expanding geographically, with new provincial pockets of affluence beyond the important and traditional centers of Ho Chi Minh City and Hanoi Capital.

One bright example apart from Ho Chi Minh and Hanoi is Danang where there have been many startups and events in 2017. DNES is an Danang – based incubator that helps startups from the early to growth stage and has accelerated over 30 founders in 4 batches since 2016.

On June 2017, the Law on Technology Transfer was revised to promote technological advances and the commercialization of technologies such as AI, IoT, Edtech, O2O, E-commerce, FinTech, and AgriTech.

On March 6th, 2018, a VIP luncheon meeting themed Blockchain & E-Governance: A Gathering at Intersection of Investment, Innovation and Policy was held by the co-operation between Infinity Blockchain Labs and Vietnam Blockchain Club, aiming to provide an open discussion about blockchain among top educators, entrepreneurs and investors.

Mr. Dung Ta VIET (Tạ Việt Dũng), Chief of the State Agency of Technology Innovation, gave a short opening remark on the main theme of the event — Blockchain & E-Governance. He stated that for the past few years, the Vietnamese Government has been strongly supportive of the adoption and application of new technologies in the manufacturing industry as well as other socio-economic fields. Specifically, this could be proven by the fact that the Vietnamese Government has been preparing a legal framework. Moreover, on July 1, 2018, the revised Law on Technology Transfer comes into effect, and this will create easier access to new foreign technology for Vietnamese corporations, because there will be greater assistance from the government in importing these technologies including blockchain. The method used to approach blockchain technology varies from one nation to another and among different fields.

Global Attention

Moreover, Vietnamese startups have many big opportunities to meet with global partners from Korea, Japan, Taiwan, Hong Kong, Thailand, US, Israel, Finland, Singapore and other countries to exchange knowledge on AI, IoT, Edtech, O2O, E-commerce, FinTech, and AgriTech. These are all areas of considerable opportunities for many industries.

Shinhan Bank Vietnam (Shinhan Bank) — one of the leading banks of South Korea, has officially taken over the retail banking segment of the Australia and New Zealand Banking Group in Vietnam (ANZ Vietnam) to expand its payment services by utilising ANZ’s resources. Moreover, we also invested in Fintech application, Shinhan Future’s lab Vietnam to accelerate the startup in Vietnam and Korean.

Start Up Campus in Pangyo Techno Valley, Korea held the Asia Startup Network, a conference that provides a platform for connecting startup accelerators, startups, venture capitals, and young entrepreneurs to present and further discuss their findings on the startup ecosystems in Asia.

In its inaugural year 2017, the conference focused on sharing trends and successful cases in Korea, China, Malaysia, India, Singapore, Philippines, and Vietnam. They were planning to hold conference annually to build the Asia international network and synergies together. I was honored to be there and tie the partnership to set up Asia Startup Network.

The Israel Embassy is actively partnering with many partners to bring Vietnamese startups to Israel to learn and grow as well as enabling Israeli startups to connect with and explore Vietnam market.

Lead the Change is a competition for young startup entrepreneurs from 18 to 25 to have a chance to challenge their ideas, learn skills, find right partner and get funded initiated by UEH Connected community.

Highlights of 2017

  • Many startup funds are established such as ESP Capital, Innovatube, VIISA and 500 Startups Vietnam.
  • SpeedUP 2017 is the fund which founded by Ho Chi Minh City Department of Science and Technology has 11.75 billion VND (520,525 USD) invested in 14 startups in Vietnam at a minimum of 350 million VND (15,505 USD) to a maximum of 1,282 billion VND (56,792 USD).
  • Tiki was founded in 2010 received 54.5 million USD (series C) from China’s JD.com and Korea’s STIC Investment.
  • The SEA Group (formerly Garena) from Singapore paid 64 million USD to acquire 82% Foody’s stakes.
  • Vntrip, a Vietnamese online travel agency has raised 10 million USD (Series B) from Hendale Capital.
  • KyberNetwork was co-founded by a Vietnamese and launched its ICO on September, 2017 taking in 200,000 Ethereum, which was valued nearly 56 million USD at that time.
  • The launch of reality television show named Shark Tank Vietnam

Why do we need to pay attention to Vietnam market?

Vietnam has 96 million people, 67% of which are Internet users, 57% are active social media users and 73% are individual mobile phone users. The annual growth rate in Vietnam is breathtaking –the percentage of Internet users increases by 28% (or 14 million people) and 20% for active social users, according to a Kepios report. This indicates great opportunities for new product ranges focusing on this consumer segment.

The success of innovations, unfortunately, depends on the go-to market stage rather than the product itself. It is also important to pay attention to the longer-term consumer needs, and catering to these needs will present economic, social and cultural opportunities and challenges for Vietnam notably not only in basic commodities or real estate but also in healthcare, agriculture, pharmaceuticals and financial services.

Moreover, Vietnamese attitudes towards technology is very positive and with great potential, 61% of Vietnamese people believe that new technologies offer more opportunities than risks and 63% prefer to complete task digitally whenever possible.

I was invited to be the speaker and judge at APEC SME O2O 2018 in Brunei and nominated one Vietnam startup tictag — One-tap-for-all NFC ecosystem to go with me to compete with 14 other startups in the APEC region. Finally, the Vietnamese startup went on to win the competition. Even more interestingly, one of my mentees edu2review.com in Vietnam received funding from an investor called Nest Tech from Singapore. This is also amazing and proved that Vietnam market is extremely potential and worth keeping an eye on.