Vietnam Leads Start-up Scene in Asia: KPMG and HSBC Report

KPMG and HSBC recently released the Emerging Giants in Asia Pacific report, which analyses new economy companies in the region with a great potential to influence the global business environment over the next ten years.

Ten leading emerging giant businesses were found in each of the 12 areas evaluated, which included over 6,472 technology-focused start-ups with valuations up to US$500 million.

Photo: KPMG According to the recently released Emerging Giants in Asia Pacific report, Asia Pacific’s developing ecosystems for the technology sector are producing billion-dollar businesses at a rapid rate. Emerging giants, which are start-ups with unicorn ambitions that are rapidly growing, influential, and innovative, are a leading indicator of the Asia Pacific region’s growth trajectory this year because the International Monetary Fund expects the region’s emerging markets and developing economies to grow 20% faster than the global average.

The report stated that although Vietnam has one of the newest and most dynamic start-up scenes in Asia, it has emerged as a hub for start-ups.

Vietnam has one of Asia’s most dynamic start-up scenes. Photo: PrimeData

It also revealed 10 "emerging giants" in Vietnam, which are: Propzy, Sipher, Sendo, Jio Health, Clevai, CoolMate, EveHR, Lozi, VUI, and HomeBase. The total value of these giants is US $0.3 billion.

Vietnam was home to just 1,600 start-ups at the start of the COVID-19 pandemic, but that total has jumped to more than 3,000 now, including four unicorns. Photo: Getty Image

Driving the country’s digital economy are a large and young population willing to test and adopt new technology consumer services, supportive government policies, and a surge in overseas funding.

The report also said VNG, a Ho Chi Minh City-headquartered super-app provider, is Vietnam’s longest-standing successful start-up to date. Launched in 2004 as a gaming business, but with offerings including chat app Zalo, which now has more than 60 million users, and e-wallet ZaloPay, it reached unicorn status as far back as 2014.

Riding the surge in e-commerce, deliveries and online media boosted by the pandemic, VNLife, operator of B2B mobile payment provider VNPay, became Vietnam’s second unicorn in 2020.

Photo: Dang Cong San Viet Nam

Venture capital deals surged to US $1.1 billion in 2021, up from US $301 million in 2020 and US $330 million in 2019. By year-end, two more companies were also unicorns: game developer Sky Mavis and the country’s most widely used e-wallet MoMo. Tim Evans, CEO of HSBC Vietnam stressed that “Vietnam has emerged as a hub for start-ups, closely competing with the likes of Indonesia and Singapore. With a young, energetic and educated population, high smartphone and internet penetration, and strong government support, Vietnam should maintain its position as a compelling destination for tech entrepreneurs and investors, making the country a thriving environment for potential unicorns.”

While e-commerce accounts for less than 5% of all retail sales, its value rose by more than half in 2021.

Luke Treolar, head of strategy at KPMG Vietnam, said similar high growth rates can be expected for the next several years, adding if that happens, the country will have Southeast Asia’s second-biggest digital economy, behind Indonesia, by the end of the decade.

Vietnam’s E-learning market projected to hit 4 billion USD by 2023 Vietnam was listed in the top 10 fastest growing Edtech markets globally, posting annual growth of 44.3 percent, according to the Vietnam Edtech Report 2021.

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