Investment in Việt Nam-based start-ups grew sharply in 2019, according to Singapore-headquartered venture capital firm Cento Ventures.
In the report ‘Southeast Asia Tech Investment in 2019’ released early this month, Cento Ventures pointed out that investment in Việt Nam-based start-ups increased most in the region, worth US$741 million, making up 18 per cent of the country-specific capital deployment, a huge jump over 2018 where it only accounted for four per cent, or $284 million.
Việt Nam accounted for a much larger share of capital invested as it produced more late-stage companies such as Tiki, VNPay and Sendo.
For the first time, investment into Vietnamese start-ups exceeded Singapore which accounted for 18 per cent of the capital invested into the region.
The number of deals also increased significantly in Việt Nam. The report revealed that there were 90 deals last year, growing from just 50 in 2018.
The report also reported changes in the landscape of technology investment in Southeast Asia last year.
The total amount invested in tech companies in the region was worth $7.7 billion, lower than the $12 billion recorded in 2018.
However, while there were fewer mega-deals, there was a significant increase in smaller venture capital deals. The total amount invested in smaller deals (less than $50 million invested) set a new record of $2.4 billion, up from $1.5 billion in 2018. In comparison, the amount poured in deals worth more than $50 million was $5.3 billion in 2019, from $10.5 billion in 2018.
Indonesia continued to capture the majority of capital invested in Southeast Asia, despite capturing a smaller proportion of the total capital invested, falling from 76 per cent in 2018 to 59 per cent in 2019.
The report pointed out that there was some change to the previous bias of investment toward start-ups based in Indonesia and Singapore, with 2019 showing greater geographical diversification in capital deployed as Việt Nam and Thailand rose to be attractive destinations.
According to the report, while most investment in the region continued to be into diverse digital businesses such as Grab and Gojek and online retailers, 2019 showed some diversification by sector. Interest in emerging sectors such as financial services and payment grew strongly, which when combined received nearly $1 billion in new capital. Newer sectors such as healthcare, logistics and education also benefited from increasing investor interest.
“Looking ahead to 2020 we expect these positive trends to continue as the fundamentals of the region remain positive – a large and rapidly digitising population that demands better online services, combined with many industry sectors adopting new technology to transform their operations,” the report said.