Vietnamese startups raise second most capital in Southeast Asia in Q2

Vietnamese startups raised $413 million in Q2, ranking second in Southeast Asia, exceeded only by Singaporean startups, which raised $1.24 billion, according to data compiled by DealStreetAsia’s Data Vantage.

Indonesian startups raised $327 million in the three-month period, placing third in Southeast Asia. Malaysia ranked fourth with $57 million.

Thailand came in sixth with $34 million, followed by the Philippines in fifth with $54 million.

In a bigger picture, according to DealStreetAsia’s Data Vantage, startup fundraising across Asia's key markets - Southeast Asia, India, and greater China - all fell in the Q2 compared with a year ago.

Startups headquartered in Southeast Asia raised $2.13 billion in the quarter, compared with $5.13 billion in the same period in 2022.

Southeast Asia's seed-stage funding, which has so far been relatively resilient amid the funding winter, is now starting to feel the chill. Only 52 startups in Southeast Asia secured seed funding in Q2, marking a 29.7% decline sequentially and a 45% plunge year-on-year.

This trend "raises concerns as seed funding plays a crucial role in helping startups get off the ground, covering essential expenses like product development, key personnel recruitment, marketing, and early-stage operations.

Previously, Vietnam Innovation & Tech Investment Report 2023 showed that startups in Vietnam secured 134 deals with venture capital investment of $634 million in 2022, down 19% and 56% year-on-year, respectively.

In Southeast Asia, Vietnam retained its third rank in terms of deals done, with 16% of the region’s total, after Indonesia with 26% and Singapore with 39%.

In 2022, for deal value, the country dropped to fourth position with 8% of the regional total, after Indonesia with 44%, Singapore with 27%, and the Philippines with 9%.

Financial services were the biggest attraction for venture capital in Vietnam last year with $214 million, and the only sector to increase in funding from $61 million in 2021. Retail saw the second-highest level with $204 million, down 57% year-on-year from $469 million in 2021.

Vietnam recorded 137 funds investing in startups in 2022, of which 30 were local ones, accounting for the biggest portion for the first time, followed by Singaporean ones with 29 and North American ones with 19.

Local venture capital firms play an increasingly important role in Vietnam’s startup ecosystem, with 61 deals worth $287 million last year, a record high in terms of value.