Vietnam's Start-Up Funding Drops 30% as Investors Tighten Their Focus

Vietnam's start-up sector faced a sharp drop in venture capital funding last year. Total investment fell to around US$215 million across 41 deals, marking a 30% decline from 2024. The slowdown reflects broader global trends and a shift in how investors allocate their money.

The downturn follows a peak in 2021, with tighter capital flows now reshaping the stock market today. Funds are becoming more selective, focusing on start-ups with proven potential and sustainable business models.

The decline in 2025 continued a correction that began after the market's high point four years earlier. Investors are now prioritising caution, with 60% of available capital directed toward follow-on and bridge rounds. This strategy aims to extend the financial runway for existing start-ups while improving their operational efficiency.

Deal sizes have also shifted. Transactions valued between $1 million and $5 million rose to 41% of the total, while smaller deals under $1 million became less common. Larger rounds, typically between $5 million and $10 million, dominated funding for start-ups with clearer market traction.

Most of the capital went to a handful of deals. The top 10 transactions accounted for 72% of the total investment, with sectors like EdTech, ClimateTech, retail, and e-commerce receiving the bulk. AI start-ups saw significant growth in 2024, attracting $80 million—an eightfold increase from previous years. Green technology, including high-tech agriculture, also drew $74 million between 2024 and 2025.

Fintech, e-commerce, and edtech remained key areas of interest. However, no single company stood out as the largest recipient in the 2025 data.

The start-up landscape in Vietnam is expected to stabilise in 2026. Investors will likely focus on businesses with strong commercialisation potential and the ability to generate real cash flows. While funding remains constrained, the shift toward later-stage, high-potential start-ups suggests a more measured approach to growth.