Vietnam’s startup scene is gaining significant attention, with a recent report revealing that its youth-driven entrepreneurial ecosystem has attracted an impressive $529 million in venture capital funding in 2024.
This substantial influx of investment is a testament to the growing potential of young entrepreneurs in the Southeast Asian country of 100 million people.
The findings come from the National Study on the State of the Ecosystem for Youth Entrepreneurship in Vietnam, a comprehensive study conducted by the University of Economics Ho Chi Minh City (UEH) and Youth Co:Lab Vietnam, an initiative co-created by the United Nations Development Programme (UNDP) and the Citi Foundation.
Key Highlights
- $529 million in VC funding raised by Vietnam’s youth startups in 2024
- Most entrepreneurs are aged 30-34, with a growing skilled workforce
- Challenges persist, including financial difficulties, limited mentoring, and urban-rural divides
- Female entrepreneurs face additional obstacles, including a lack of mentorship and resources
- Policy improvements and technological advancement are driving the ecosystem’s growth
Youth-led Entrepreneurship fuels economic growth
Vietnam’s startup ecosystem is primarily driven by young entrepreneurs aged 16 to 35, with those between 30 to 34 years old representing the largest segment, estimated at 6.6 million individuals. This demographic has contributed to a 12.4% increase in the skilled workforce over the past 14 years, bringing the current skilled workforce percentage to 27.2%.
The influx of venture capital funding highlights the country’s rising position as an emerging tech hub in Southeast Asia. Vietnam ranks 44th globally in the Global Innovation Index this year, underscoring its growing reputation for innovation and entrepreneurial spirit.
Key success factors and challenges in the Startup ecosystem
The study assessed the state of Vietnam’s youth entrepreneurship ecosystem based on six crucial factors: human resources, entrepreneurial culture, technology and innovation, regulatory frameworks, business infrastructure, and financial support.
While the funding surge reflects the country’s potential, several challenges persist:
- Legal and Operational Hurdles: An online survey of 210 young entrepreneurs and founders revealed that around 36% of startups have not yet registered as legal enterprises, highlighting the complexity and barriers in the formalization process.
- Financial Struggles: Many startups still face financial difficulties, compounded by a shortage of strategic advisors to guide them through the challenges of scaling their businesses.
- Gender Disparities: Female entrepreneurs are notably disadvantaged, with 31.8% of female-led enterprises reporting poor performance. Many women entrepreneurs also face difficulties accessing mentors (38.6%) and technical support (21.6%).
- Urban-Rural Divide: There is a clear divide in terms of access to resources and support between urban and rural areas, with those in rural regions often unable to tap into the same level of investment and mentoring opportunities.
Road ahead
Despite these challenges, the study highlights several positive developments. Policy improvements are seen as key drivers for future growth, as the government continues to refine its approach to fostering innovation and entrepreneurship. Furthermore, rapid technological advancements and increased access to new tools are helping bridge some of the gaps for young entrepreneurs.
The report also emphasizes the potential of Web3 technologies, suggesting that the ongoing development of blockchain and decentralized systems could help unlock new opportunities for startups.
Vietnam’s youth startup ecosystem is not only attracting substantial venture capital but is also positioning itself as a key player in Southeast Asia’s innovation landscape. However, for the ecosystem to reach its full potential, challenges such as financial accessibility, mentorship gaps, and the gender divide must be addressed.
