Despite this substantial growth, funding was down by 40 per cent when compared with the third quarter of 2022. Breaking down the funding landscape, the early-stage rounds played a dominant role, contributing almost 98 per cent of the total funding for the quarter, amounting to $49 million.

However, seed-stage rounds experienced an 87 per cent drop to $1.1 million in the third quarter of 2023, compared with the second quarter of 2023, and a 92 per cent drop compared to the third quarter of 2022 amounting to $13.8 million.

Key segments that garnered significant funding included fintech, life sciences, and enterprise applications. Fintech emerged as the highest-funded sector, securing $29 million in the third quarter of 2023 and exhibiting a remarkable 180 per cent growth compared with the third quarter of 2022.

While Vietnam did not witness any unicorns or IPOs in the given period, the Vietnam startup ecosystem remains promising, driven by government support and a strategic push towards a cashless economy.

In contrast, there was one acquisition in the third quarter of 2023, marking a 75 per cent decrease compared to the previous quarter and a 50 per cent decrease on-year.

Ho Chi Minh City and Hanoi were the only cities in Vietnam that attracted significant funding, showcasing their prominence in the growing tech startup landscape. Startups in Hanoi secured funding worth $33 million, while those based in Ho Chi Minh City raised $17.1 million.

Nextrans, VSV Capital, and CyberAgent Capital are among the top investors in the Vietnam Tech space.

Resolution Ventures and VCAM were the lead investors in seed-stage investments in this quarter. Peak XV Partners, Granite Oak and JAFCO Asia were the most active investors in the Early Stage

The report noted that Vietnam's tech startup ecosystem continues to make waves, maintaining its position as the third highest-funded startup ecosystem in the Southeast Asia region.

The Vietnamese government is also taking proactive steps to boost long-term growth within the startup ecosystem. Initiatives include tax exemptions for IT companies and favourable land rent concessions, signalling a commitment to fostering a conducive environment for startups to thrive. Additionally, the government is driving efforts to establish a cashless economy, further supporting the burgeoning fintech sector in the region.