Vietnam fintech funding plummets 84% in 2023

For the second year in a row there were no late-stage funding rounds.

Funding to Vietnam financial technology (fintech) companies plunged by 84% in 2023, to just $35.3m across just 8 funding rounds. In comparison, Vietnam fintechs raised $227m in 2022, according to data from Tracxn.

This is the country’s least funded year since 2021.

The funding slowdown was attributed to the lack of late-stage funding rounds. There were no-late stage funding rounds for the second consecutive year, versus the $300m raised in 2021.

There were also no $100m rounds observed in the Vietnam fintech space in 2023, and no new unicorns emerged from the sector.

On the upside, the horizon is expected to be much brighter for Vietnam’s fintech sector.

“The Vietnam FinTech market is expected to grow at a higher rate in the coming years. Its growing tech-savvy young population and digitalization are expected to accelerate growth in this region,” Tracxn said in a press release.

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The Vietnam government has reportedly also supported development in this sector. Most recently, the government launched the National Strategy on Digital Transformation, which aims to increase the Digital economy share in the GDP to 20% by 2025. 

The State Bank of Vietnam is also notedly developing a Sandbox environment where FinTech startups can test their novel products and it helps the government to learn risks associated with new business models and thereby develop regulations that will motivate innovation, Tracxn wrote.

Early-stage and seed-stage funding lower
Early-stage funding stood at $33.1m in 2023, 84% lower than the $207m raised in 2022.

Seed-stage investments totalled $2.2m, 89% lower than the $20.7m raised in 2022.

By segment, alternative lending, banking tech, and insurance IT attracted the most number of investments amongst Vietnamese fintechs.

Local fintechs in the alternative lending space clinched a total funding of $17.1m in 2023, 50% higher than a year earlier. 

The banking tech segment, meanwhile, secured funding worth $10m, half of what it got in 2022.

Funding in the insurance IT space stood at $6min 2023, compared with $2.5m funding in 2022.

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Infinity Capital, X21 Digital and Avstar are the most active investors in this space.

Y Combinator, Resolution Ventures, and ThinkZone were the top investors in seed-stage rounds in 2023; whilst Peak XV Partners, JAFCO Asia, and Patamar Capital were the most active early-stage investors, reports Tracxn.