Investment capital in Vietnamese startups decreased by 49% in the first quarter of 2023
This is not surprising news when Vietnam's economy is going through a volatile period in the post-COVID-19 context and is affected by the general instability of the global economy.
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Total amount invested in startups in Vietnam every quarter. Photo: Tracxn / TechinAsia
According to a recent technology report released by Tracxn, Vietnamese startups raised a total of USD 40.6 million in the first quarter of 2023 – 49% lower than the same period in 2022. These funding activities took place in Ho Chi Minh City and Hanoi, and the most active investors during that quarter were Touchstone Partners, Resolution Ventures and UOB.
The report adds, over the years, the capital poured into startups in Vietnam has continuously increased, even reaching a record in the fourth quarter of 2021, but since then it has tended to decrease - when the market is in recession. Even so, at least the investment capital in the first quarter of 2023 is still 40% higher than that of the fourth quarter of 2022.
In addition, early-stage investments fell 23% year-on-year. Investors are now more cautious, tending to support existing companies in the portfolio instead of betting on new faces. At the same time, investors also seriously consider the profitability of the business to divest.
In the context of a recession, startups cannot keep the same way of spending money as before. In fact, many startups have fallen into the "deadline" due to running out of capital. Typical among them is Propzy - one of the first technology-applied real estate trading platforms in Vietnam. In mid-2020, Propzy still raised $ 25 million in investment capital, but with the speed of "burning money" so fast, after only two years, they had to close. This is the inevitable outcome after many years of continuous losses, combined with the inability to raise capital due to difficulties and fluctuations in the market.
Tracxn said that the Vietnamese economy is going through a volatile period in the post-COVID-19 context and political uncertainties around the world. Vietnam has had no new unicorns since quarter 4 of 2021.