Cautious approach: A street vendor walking past a mural in Hanoi. In 2025, the failure rate among startups remained high in Vietnam, with only about 29.5% successfully securing funding. — AFP
HANOI: The Vietnamese venture capital landscape faced significant challenges in 2025, with the number of investment deals plummeting to approximately 41 transactions, alongside total funding reaching around US$215mil.
This downturn continues the trend of decline that began in 2021 amid tighter global liquidity and a structural reset in investor risk appetite, according to the Vietnam Tech & Venture Capital Outlook 2025 report published by VinVentures.
Despite the downturn in overall transactions, a noteworthy trend has emerged: capital is becoming increasingly concentrated and selective.
A significant portion of investments is now directed towards later-stage funding rounds, typically ranging from US$5mil to US$10mil.
This indicates a shift in strategy, with funds favouring investments in companies that have already demonstrated market traction and possess relatively clear business models.
This cautious approach resembles private equity investment strategies, focusing on sectors deemed more reliable and capable of generating cash flow, such as edtech, climate technology and eCommerce/retail.
VinVentures observed that Vietnamese venture capital funds were shrinking and conserving their existing portfolios.
Approximately 60% of capital resources are now allocated to follow-up funding rounds and bridge financing for previously invested companies, rather than pursuing new deals.
This defensive strategy demonstrates investors’ prioritisation of stability and risk minimisation amid uncertain exit prospects.
As a result, the trend has led to a continued decline in ultra-small investments. The transaction structure reflects a notable shift, with deals sized between US$1mil and US$5mil increasing from 21% to 43%, while smaller amounts have seen a drastic reduction.
In 2025, the failure rate among startups remained high, with only about 29.5% successfully securing funding.
Notably, 70% of those that did raise funds reported generating revenue, underscoring the crucial need for evidence of market appeal as a prerequisite for capital access.
Meanwhile, the domestic initial public offering (IPO) market showed signs of improvement over the past year, highlighted by several large listings in the financial sector, such as Techcom Securities and VPBank Securities.
However, the absence of successful tech IPOs continues to dampen venture capital investor sentiment, alongside a lack of clear recoveries in the mergers and acquisitions market and stock exchange. Experts suggest that with fewer active investors, 2025’s funding is concentrated primarily on sectors that have demonstrated effectiveness and measurable outcomes.
Software-as-a-Service and enterprise artificial intelligence continue to represent a significant proportion of early-stage deals, with funding heavily focused on seed to pre-Series A rounds aimed at validating market demand and refining business models.
The healthcare technology sector also witnessed a more stringent selection process from investors this year. Most funded deals involved companies with established operations and stable appeal in high-demand, sustainably growing segments.
Vietnam remains one of the most promising markets in South-East Asia, characterised by stable trade activity and controlled inflation. — Viet Nam News/ANN
