The annual report, which was published by the National Innovation Centre (NIC) in partnership with Do Ventures on April 26, provides a detailed look at investment trends in the Vietnamese startup ecosystem.

Accordingly, the deal count stayed relatively stable, experiencing only a slight 9 per cent decrease, resulting in a total of 122 deals closed during the year. These figures highlight a continuing trend affected by challenging global economic conditions, which has tended to heavily affect later-stage deals value since the highs in 2021.

Despite experiencing a 17 per cent decline in VC funding last year, Vietnam’s investment landscape appeared relatively optimistic when contrasted with the global scenario. While global VC funding plummeted to around $345 billion, marking a significant 35 per cent decrease from the preceding year, Vietnam’s VC funding demonstrated a notable level of resilience.

In the latter half of 2023, there was an increase in deal count compared to the first half. However, due to smaller deal sizes, the total deal value for the second half was lower than that of the first half. Yet, the deal value in the second half of 2023 surged by 34 per cent compared to the previous year, surpassing the levels seen in both 2022 and 2020. Following a steep decline in deal value during the second half of 2022 compared to the peak of the second half of 2021, signs of a rebound began to emerge in the second half of 2023.

The distribution of late-stage deals and mid-to-early deals remained relatively consistent compared to the trends observed in 2022. In comparison to 2022, deals valued at $10 million comprised a slightly larger portion, accounting for 69 per cent of the total investment landscape.

Excluding deals worth more than $50 million, the number of deals in the $0.5 million - $3 million range saw the smallest decline among other check sizes, indicating the healthy state of the core venture capital segment and offering positive signs for the ecosystem. This trend suggests that investors maintain an optimistic outlook for early-stage deals, likely due to their confidence in the higher calibre of founders launching businesses during challenging times.

The Pre-Series A deal count remained healthy, experiencing only a slight decrease from the peak in 2021. There was an increase in the number of Series B deals compared to the previous year. In contrast, there was a significant decline in the median deal size for Series B investments, which can be attributed to startups seeking to raise smaller amounts or opting for fundraising in tranches to minimize dilution during a period of contracted valuations.

The report highlighted that Vietnam retained its third place ranking in terms of deal count and climbed back to third place in terms of deal value in Southeast Asia in 2023. Singapore took the lead in both deal value and deal count, with Indonesia following closely behind.