Fintech, e-commerce remain magnets for venture capital

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Fintech and e-commerce accounted for 70% of total venture capital in the country last year, and this trend is predicted to continue in 2022, Dau tu (Vietnam Investment Review) reported.

Capital poured into startups reached US$1.4 billion in 2021, rising three-fold from the US$451 million in the previous year. Up to 70% of the investment was channeled into fintech and e-commerce, according to the Vietnam Innovation & Tech Investment Report recently released by the Vietnam National Innovation Centre and venture capital firm Do Ventures.

Five transactions worth over US$100 million were recorded in payment, e-commerce, and gaming last year.

In fintech, the MoMo e-wallet app succeeded in raising about US$200 million in the Series E funding round, bringing its parent firm’s value to over US$2 billion. Another major transaction is that VNLife, which owns the VNPay payment service, attracted more than US$250 million in the Series B round.

In e-commerce, Tiki raised US$258 million in Series E, which was led by AIA, while KiotViet received US$45 million in the Series B funding led by KKR.

The gaming industry emerged as the third biggest recipient of venture capital thanks to the global success of Sky Mavis with its Axie Infinity. Sky Mavis successfully raised US$152 million in Series B, led by the US-headquartered Andreessen Horowitz.

In 2021, Vietnam saw the appearance of two new tech unicorns (technology-based startup companies with value of over US$1 billion) – MoMo and Sky Mavis. So far, the country has had four tech unicorns, namely VNG, VNLife, MoMo, and Sky Mavis, along with 11 startups valued at over US$100 million, including Tiki and EQuest.

Aside from those sectors, others also witnessed a boom in transactions due to impacts of the COVID-19 pandemic, leading to a surge in investment. Among them, health care, education, and enterprise digital transformation posted breakthrough growth last year, at 1,016%, 526%, and 205%, respectively.

Le Hoang Uyen Vy, CEO of Do Ventures, forecast e-commerce and fintech will remain the leading sectors in attracting venture capital as more and more consumers are using online services.

Investors will also continue paying attention to new and potential areas like the creator economy, upskilling platforms, and Web 3.0 with the increasing presence of cryptocurrency and blockchain technology.

KPMG, a global network of professional firms providing audit, tax and advisory services, forecast investment in the tech industry will shoot up 150% to hit US$2 billion in 2022, and e-commerce and fintech will remain magnets to investors’ attractions.

Online transactions are also expected to keep developing even when the pandemic is over thanks to the Government’s resolve to boost digital transformation and the growth of tech-savvy youngsters.

Some of the biggest Vietnamese beneficiaries from this trend include VNG, VNPay, Sky Mavis, MoMo, and Tiki, according to KPMG.

In 2021, the capital raised in the over-US$10 million funding rounds hit a record of nearly US$1.2 billion, making up more than 82% of the total. The sum raised in the under-US$10 million funding rounds also reached a new level – US$256 million, soaring 118% year on year, the Vietnam Innovation & Tech Investment Report pointed out.

For more information, please contact Vietnam Trade Office in Canada at Ca@moit.gov.vn