Vietnam leads Southeast Asia in startup and technology growth

The data are stated in the Startup Ecosystem Assessment Report, released on the morning of December 12 within the framework of Techfest Vietnam 2025. According to Mr. Luong Van Thuong, Head of Creative Startup Department, Department of Startups and Technology Enterprises, the report shows that “Vietnam is affirming its position as an emerging technology investment destination in Southeast Asia”.

At the event, Mr. Thuong described the picture of startups in 2025 through the 5P assessment framework including institutions, progress, finance, circulation and people. In particular, the “institutional” factor is the foundation, with the completion of the legal corridor to support businesses’ innovation.

The “progress” aspect is most clearly seen in the explosion of artificial intelligence (AI). Private capital flows into AI startups in 2024 will reach 80 million USD, an eight-fold increase. The report notes that 170,000 businesses have applied this technology, by the end of 2025. Along with that is the rise of the semiconductor industry, with more than 50 chip design businesses and 7,000 engineers, doubling after three years. Digital infrastructure continues to improve, 4G coverage reaches 95% and 5G coverage is also expanding.

Regarding “finance”, venture capital flows also reflect a shift towards new trends. In 2024, total venture capital investment in Vietnam will reach 398 million USD with 118 transactions.

The three areas with the strongest growth include digital transformation with 84 million USD (up 562%), agricultural technology with 74 million USD (9 times more than in 2023) and AI with 80 million USD (8 times more than in 2023). In contrast, capital flows into fintech decreased by 61% due to market saturation.

In the “circular” aspect, technology to respond to climate change is emerging, with motivation from the Net Zero goal and the plan to operate a carbon credit exchange by 2026. The report shows that venture capital flows in Vietnam are shifting strongly to climate technology startups, with a proportion double the global average.

The “human” aspect shows a paradox, when Vietnam ranks 44th on the Global Innovation Index (GII) but only ranks 70th in the world in terms of human capital. According to the report, a brain drain is occurring, with 65% of tech talent working abroad.

The lack of professional R&D and “mentor” human resources is also a barrier that makes it difficult for Vietnam to develop core technology. However, policies to support women, students, and startups are expected to help improve the situation.

Regarding the local startup ecosystem, startup activities in this area are considered “relatively diverse”. However, there is still a large gap, when 68% of support activities are concentrated in the Southeast, making this a “magnet” to attract resources, while the Central Highlands and Northern Midlands receive less support.

According to the Department of Startups and Technology Enterprises, eight prominent trends of Vietnamese startups in the coming time include climate technology, creative economy, technology startups for the elderly, educational technology, plastic innovation, women-owned businesses, electric vehicle startups and the Vietnamese startup community abroad.

Techfest Vietnam 2025 is organized by the Ministry of Science and Technology in collaboration with the Hanoi People’s Committee from December 12 to 14, with the theme “Startup for all people – New growth driver”. The event is expected to attract about 60,000 live and online attendees, along with 1,200 investment funds, incubators and 1,700 domestic and foreign startups.