As a result, fundraising has become increasingly difficult for startups. Against this backdrop, it is important to identify where opportunities are emerging, how founders can position their businesses amid constrained capital, and what realistic expectations look like in the current investment cycle.
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| Vinnie Lauria, founding partner Golden Gate Ventures |
When we speak with startups in Vietnam, conversations often focus on valuations and the scale of capital flows, many of which remain anchored in the post-pandemic boom. During the pandemic, as activity shifted online, digital adoption surged and venture capital and private equity firms invested aggressively.
However, this period has seen a sharp correction. Even companies like Zoom have not regained their pandemic-era momentum, while gaming and entertainment platforms have experienced significant declines in engagement. As a result, a substantial amount of capital in the venture capital and private equity markets was pulled back relatively quickly.
In Southeast Asia, investment levels are now normalising in line with the region’s underlying growth fundamentals, though they remain well below the peak levels of a few years ago. This adjustment has distorted expectations, particularly among some founders and CEOs.
Another trend we are seeing in Vietnam concerns misaligned fundraising assumptions. Some founders believe that incorporating in Delaware and targeting the US market will naturally lead to Silicon Valley investors and US-style valuations. In practice, this is extremely difficult.
Most of these companies are still operating from Vietnam, while Silicon Valley is a deeply network-driven ecosystem, where investors place greater weight on where founders are based, their backgrounds, hiring networks, and existing relationships. As a result, the likelihood of raising capital from there is significantly higher for teams physically based there.
This does not make US fundraising impossible, but it does mean founders often need to reset expectations. Adopting a more realistic and grounded approach to fundraising is usually more effective, and more sustainable, over the long term.
Another key issue in Vietnam is that early-stage fundraising remains more difficult than in some neighbouring markets, largely due to limited visibility on follow-on capital.
In markets such as Singapore and Indonesia, a strong base of corporate and strategic investors helps support later funding rounds. In Vietnam, however, this layer of the ecosystem is still underdeveloped, with venture investment remaining a relatively new concept for many corporates.
As a result, early-stage startups face greater uncertainty around where future capital will come from, making bottom-up fundraising significantly more challenging.
At the same time, the investment playbook has shifted. Two years ago, startups were often evaluated primarily on top-line growth, with a strong emphasis on scale and aggressive expansion. Growth was heavily subsidised, as seen in platforms such as Grab and Gojek.
Today, investors are far more focused on profitability, or at least a clear and credible path towards it. Strong unit economics and near-term visibility on improvement have become central criteria for both early- and later-stage funding decisions.
With global capital increasingly interconnected, funding is flowing towards areas with clear value creation, notably business-to-business (B2B), AI, and software-as-a-service. Companies are willing to pay for software and services that deliver tangible returns, and AI remains particularly attractive due to its novelty and long-term potential.
We are therefore seeing more capital directed to B2B service providers with globally distributed teams, many of which are raising funds through hubs such as Singapore. Recent acquisitions, such as Manus AI by NetApp, which was acquired by Meta, highlight this trend: international teams, often based in Singapore, can serve global customers and become compelling acquisition targets for large US technology firms.
In this context, a Singapore-based corporate structure continues to offer advantages in fundraising, attracting follow-on investors, and forming strategic partnerships.
Despite these opportunities, several factors still constrain the growth of Vietnam’s startup ecosystem. One commonly cited phrase is “Vietnam is different”, used by both founders and investors. While cultural differences exist, when it comes to building scalable digital products and business models, the fundamentals are far more similar across markets than is often assumed.
A few additional issues are worth noting. Financial reporting standards in Vietnam still lag those of other regional markets, much as Indonesia did a decade ago, making fundraising more difficult. Improving transparency and financial discipline remains essential to broadening access to capital.
Product prioritisation, particularly user experience, is another challenge. Many apps, including banking platforms, still feature inefficient user interfaces, such as redundant authentication steps or unnecessary pop-ups. While seemingly minor, these frictions reflect a lack of user-centric design and can constrain scalability.
The same applies to subscription and payment flows, where automatic billing, standard globally, remains limited in Vietnam. Core app fundamentals such as performance, size, and loading speed are also critical, especially in emerging markets; Zalo stands out as a positive example of disciplined execution at scale.
