Bloomberg on February 14 published an article “Silicon Valley talent is helping grow Vietnam’s startup hub”, quoting founders’ opinion that an abundance of inexpensive engineers coupled with a fast-growing economy makes Vietnam an attractive spot for startups.
The article cites a report published in July 2022 by KPMG International Ltd and HSBC Holdings Plc which states that the number of startups in the country nearly doubled from the beginning of the COVID-19 pandemic to mid-2022,
Some of the world’s largest investors including Sequoia Capital, Warburg Pincus LLC, and Alibaba Group Holding Ltd are backing startups offering promising solutions.
According to data from Google, Temasek Holdings Pte., and Bain & Co, in 2021, Vietnam drew a record $2.6 billion through 233 private deals, up from $700 million via 140 deals of the previous year.
According to investment firm Do Ventures, local startups are also competing against businesses from throughout Southeast Asia. Investment in startups in Vietnam accounts for 13% of the total venture funding flows into the region after Indonesia and Singapore in 2021.
Bloomberg’s article also mentions the Vietnamese Government aims to turn Ho Chi Minh City into a magnet for tech funding and is striving to grow its digital economy which is expected to represent 40% of the southern city’s gross domestic product.
The city’s authorities thus prioritise attracting foreign investment to high-tech projects, while also offering other incentives to lure global talent and international firms to establish innovation research centres.
Experts said that Ho Chi Minh City has factors to make it the next Silicon Valley including a heavy math and science educational system, a decades-old software outsourcing industry that’s created an abundance of inexpensive and talented engineers, and the benefits of Vietnam’s 2021 economic growth - one of the fastest across Asia.