The Rise of Vietnamese Tech: Unlocking the Potential of Capital Markets for “Unicorn” Startups

In today’s digital era, Vietnam recognizes the pivotal role of science, technology, innovation, and digital transformation as key drivers of its economic growth and national advancement. The Politburo’s Resolution No.57-NQ/TW, issued on December 22, 2024, underscores this by emphasizing these areas as “top priority breakthroughs” for the nation’s new growth model.

At a recent workshop on the capital market’s role in fostering Vietnamese tech firms, Minh highlighted the importance of a robust capital market in nurturing innovation among technology businesses. Leading economies such as the US, China, and Singapore have successfully developed their capital markets to enable startups to secure funding through Initial Public Offerings (IPOs), thus creating “unicorns” – startups valued at over 1 billion USD.

Despite Vietnam’s vibrant startup ecosystem, the emergence of “unicorns” has been relatively scarce. As of 2021, Vietnam was home to four tech unicorns: VNG, MoMo, VNLife (VNPay), and Sky Mavis, securing the nation’s third place in Southeast Asia, after Singapore and Indonesia.

In the midst of the global digital transformation wave, technology serves as both the driving force and the foundational pillar propelling economic growth. (Photo: kinhtedothi.vn)

The Institute for Digital Economy Development Strategy (IDS) noted that the Law on Securities No.54-2019-QH14 presents a challenge for startups, requiring enterprises to be profitable for two consecutive years before qualifying for an IPO. This poses a challenge for early-stage startups that are primarily focused on research and development, making it difficult to access the necessary capital for expansion.

Dr. Tran Van, Director of the IDS, suggested that while current capital mobilization forms are suitable for nascent startups, IPOs become increasingly crucial as businesses mature. He proposed that Vietnam emulate international markets like China, the US, and Singapore, which have adapted their policies to better support tech startups in going public. He further recommended that technology companies be allowed to list without being constrained by the condition of “no accumulated loss,” particularly on exchanges such as HoSE, HNX, or the International Finance Centre.

IDS also advocated for flexible listing policies tailored to tech enterprises and the establishment of International Financial Centers in Ho Chi Minh City and Da Nang to attract domestic and foreign investment.

Mr. Il-Dong Kwon, Managing Director of Boston Consulting Group Vietnam, commended the Vietnamese government’s pro-innovation policies, specifically Decision No.1236/QD-TTg on blockchain technology development. He also highlighted Vietnam’s strengths, including its young and tech-savvy population, talented engineering force, and rapid digital transformation. Fields such as fintech, artificial intelligence, e-commerce, and blockchain hold immense potential but require improved access to capital and streamlined divestment mechanisms.

Additionally, the development of the capital market necessitates the removal of legal and institutional barriers and the stringent handling of manipulative behaviors to foster investor confidence. Attracting and retaining top talent is also essential to ensuring a high-quality workforce that can drive the technology industry forward.