Vietnamese Fintech Startups Secure Modest $6.2 Million Funding in First Half of 2023

Vietnamese Fintech Startups Secure Modest $6.2 Million Funding in First Half of 2023

According to a report from Tracxn, a global SaaS-based market intelligence platform, the fintech sector in Vietnam has experienced a significant decrease in funding during 2023. This decline can be attributed to the lingering effects of the funding winter and the prevailing global macroeconomic uncertainty. Despite these challenges impacting the startup funding landscape, experts remain optimistic about the sector’s rebound as the global economy stabilizes.

Vietnam’s economy has witnessed substantial growth over the past decades, resulting in a significant increase in per capita income, which multiplied by 3.6 times between 2002 and 2021. The country’s projected economic growth of 6.3% in 2023 further highlights its potential for continued expansion.

However, the report highlights a remarkable drop in fintech funding during the first half of 2023, with a mere $6.2 million secured. This represents a staggering 97% decrease compared to the $201 million recorded in the same period in 2022. Similarly, the funding for the first half of 2023 was 67% lower than the $17.9 million registered in the latter half of 2022.

One notable factor contributing to this decline is the absence of late-stage funding rounds, which have been completely absent in the Vietnamese fintech space throughout 2022 and 2023. Among the funding rounds that did occur, early-stage investments constituted the majority, contributing $5.1 million to the total. However, this amount reflects a steep 97% decrease compared to the substantial $195 million raised during the first half of 2022. Furthermore, early-stage funding for the first half of 2023 was down 32% compared to the $7.5 million secured in the last six months of 2022.

Seed-stage funding also saw a considerable reduction, amounting to only $1.1 million. This marks an 82% year-on-year decrease and an 89% drop compared to the second half of 2022.

Analyzing the quarterly funding, the difference is evident. The first quarter of 2023 recorded a total of $5.1 million, signifying a 76% decrease from the $21.2 million secured in the first quarter of 2022. In the second quarter of 2023, funding experienced a staggering 99% decline, plummeting from $180 million in Q2/2022 to just $1.1 million in Q2/2023.

During the first half of 2022, the Vietnamese fintech sector witnessed only one funding round exceeding $100 million, and since then, none have surpassed this milestone. Additionally, the sector has not produced any unicorns, nor witnessed any acquisitions or initial public offerings in the past two years.

Hanoi is the only city in the nation to secure funding for the fintech sector during the first half of 2023. Key investors that have played a pivotal role in shaping the local fintech landscape over the past two years include CIE IIITH, Y Combinator, WeFounder Circle, Integra Partners, and Genting Ventures. CIE IIITH, Y Combinator, and WeFounder Circle have been significant players in the seed-stage investment domain, while Integra Partners and Genting Ventures have emerged as prominent investors in early-stage funding rounds.

The Vietnamese government is actively contributing to the growth of the fintech sector through its National Digital Transformation Programme. This ambitious initiative aims to achieve significant milestones, including transitioning half of all banking operations online, providing half of the population with digital bank accounts, and facilitating 70% of transactions through digital channels.

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