Vietnam Innovation & Private Capital Report
1. Vietnam’s Resilient Economic Growth Creates a Strong Foundation for Investment
Vietnam has demonstrated remarkable economic resilience, achieving an average of 6% annual real GDP growth over the past decade. In 2024 alone, growth reached 7.1%, positioning the country to lead Southeast Asia. Propelled by export-oriented manufacturing and a shift toward higher value-added industries, Vietnam is projected to become one of the world’s top 25 economies within the next decade. Nominal GDP is forecast to be over $1.1T in 2035, supported by stable inflation and increasing productivity.
2. A Unique Macroeconomic Setup Unlocks Strategic Opportunities
With $25B in FDI disbursed in 2024, the country is attracting manufacturing and logistics investments from global players like Samsung, Lego, and Intel. Domestically, rising middle and affluent classes - expected to reach 46% of the population by 2030 - alongside rapid growth in Tier 2 cities (e.g., Bac Ninh, Can Tho, Da Nang), are opening vast new consumer and business markets. Simultaneously, Vietnam is undergoing a major infrastructure expansion, with investment planned until 2050 across 5 key transportation sectors.
3. A Supportive Environment for Private Capital
The government’s National Master Plan (2021–2030) emphasizes digital, green, and hi-tech economy pillars. Financial infrastructures are maturing rapidly through capital market reforms, legal updates, and strategic initiatives such as the establishment of international financial centers and blockchain development frameworks. These improvements enhance visibility, transparency, and future exit opportunities, helping to attract both domestic and foreign private capital.
4. Vietnam Leads Asia’s Digital and AI Revolution
Vietnam’s digital economy reached $36B in 2024 (18.3% of GDP) and is on track to contribute 30–35% by 2030. Resolution No. 57, a landmark policy, is catalyzing nationwide science, tech, innovation, and digital transformation. With over 500,000 IT workers and strong support for startups, Vietnam is set to become Southeast Asia’s second-largest digital economy. Government initiatives, corporate-led digitalization, and foreign investment in AI and semiconductor R&D are accelerating growth.
5. Multiple Value-Creation Pathways for Private Capital
Vietnam offers a spectrum of private capital opportunities, including:
- Partnering with local champions to scale regionally
- Backing emerging digital startups and national champions
- Consolidating traditional sectors with tech and operational excellence
- Investing in green infrastructure and digital public services
- Supporting underserved sectors like healthcare and education
Key success factors include building local partnerships, investing in talent, leveraging digital tools for deal sourcing and transformation, and nurturing integrated ecosystems.
6. Market Tightening, but Deal-Making Remains Resilient
Despite a 35% decline in capital deployed, Vietnam recorded $2.3B across 141 deals in 2024. Deal count held steady across both PE and VC, signaling sustained investor confidence in Vietnam’s fundamentals and long-term trajectory. The private capital market has moved past the post-pandemic surge into a more selective, fundamentals-driven phase.
7. A Comeback for Smaller Early-Stage VC Deals
Early-stage VC activity showed strong signs of revival in 2024. Deals under $0.5M rebounded with 57 transactions, reflecting continued appetite for seeding the next generation of Vietnamese startups.
8. Mature and Sizable Deals Remain Strong in PE
Vietnam’s PE landscape saw $1.9B deployed, with buyouts making up $1.7B, demonstrating investor preference for mature, cash-generating businesses amid a cautious macro backdrop. Mid-sized deals ($100M–$300M) rebounded sharply - deal value rose 2.7x YoY to $700M - indicating growing appetite for scalable platforms.
9. High-Tech and Sustainability Sectors Gained Momentum
VC activity in 2024 was led by productivity-enhancing sectors:
- Business Automation surged 562% YoY
- AI funding rose from $10M to $80M (8x), as Vietnam emerged as a leading AI startup hub in ASEAN
- AgriTech investments jumped 9x, reflecting digitization in agriculture and food value chains
- GreenTech deals more than doubled, supported by ESG mandates and a strong policy push toward carbon neutrality and renewable energy
These sectors are backed by strong government incentives and rising investor interest in long-term structural shifts.
10. Investor Participation Strengthened in VC and Remained Steady in PE
Nearly 150 VC investors - the highest number since 2021 - were active in Vietnam in 2024, led by players from Singapore, Japan, and Vietnam. In PE, investor activity remained stable, with domestic GPs and corporate investors playing a dominant role amid thinning foreign participation. The ecosystem continues to diversify and deepen, laying the groundwork for future capital inflows and exits.
