The ecosystem also saw 8 acquisitions worth US$128 million

Vietnam

Vietnam’s tech ecosystem reaped a bountiful harvest last year, thanks to strong support from both local and foreign investors, according to a report by Vietnam-based accelerator Topica Founder Institute (TFI).

The total number of deals shot up to 92, nearly doubling that of 2016 (which was 50), though 20 resulted from startups joining the newly-formed VIISA accelerator; each of them received an equity funding of US$30,000.

One other reason for the sharp growth is that more local VCs and angel investors, and startups are now more comfortable in disclosing deals, said Bobby Liu, Co-director of TFI.

Thanks to the influx of foreign investments, the total collective startup deal value soared to US$291 million, a 44 per cent growth from 2016,

NYSE-listed Sea Group (formerly Garena) was a particularly voracious foreign investor: It acquired a 82 per cent stake in restaurant review platform Foody, a deal worth US$82 million (the largest in 2017). It also acquired two fintech and logistics startups in undisclosed deals reportedly worth up to US$50 million.

Other notable investments were the US$54 million Series C investment in e-commerce platform Tiki jointly made by Chinese internet giant JD.com and South Korea’s STIC Investments, Hendale Capital’s US$10 million investment in Vntrip, and TNB Ventures undisclosed US$20 million Series A investment.

Here’s a brief breakdown of the deals closed in Vietnam in 2017:

  • 61 startups received US$1 million or less;
  • 17 startups received between US$1 to 5 million;
  • 5 startups received between US$5 to 10 million;
  • 3 startups received between US$10 to 20 million;
  • 3 startups received over US$20 million.

Of the 92 deals, 64 were made by local investors, though their ticket sizes were eclipsed by foreign players by nearly US$200 million.

In total, there were at least eight acquisitions, netting Japan’s CyberAgent Ventures a tidy return as it has a stake in four of these companies (Foody, CleverAds, Tiki, Vexere).

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Note: TFI did not include Telenor’s acquisition of classified platform 701Search worth US$109 million into the report as the business, though Vietnam-based, involves a complex business structure.

Verticals that benefitted the most

E-commerce was the biggest winner in Vietnam, clinching 21 deals worth around US$83 million.

Interestingly, foodtech attracted more money (US$65 million) than fintech (US$57 million).

“Yes, it is an anomaly but this is due to: Acquisitions conducted by VNG and Sea in foodtech, and because 2016 had mostly fintech funding and so that vertical is going through a cycle,” explained Liu.

“For 2018, I see Edtech becoming among the top three categories, with logistics featuring strongly. Fintech will still be one of the main verticals, especially with e-wallet players,” he said.

Last year, Vietnam entrepreneurs also joined in with the rest of the tech world to leverage on the crypto craze. Cryptoassets solution startup Kyber Network managed to raise around US$60 million via its ICO.

Liu said he expects more ICOs to pop up this year, but advised caution.

“ICOs are hot right now and have heard of a few startups getting into that but it’s not been included in our fundraised numbers, as we see ICOs as more revenue streams than equity form of fundraising,” he said.

“Crypto has been active the last 2 years, even prior to last year’s fever and this will continue. However, it’s still an activity that will be below-radar as officially it’s ‘illegal’.”

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