Silicon Valley pours funding into start-ups in Vietnam, pegged as Southeast Asia’s next tech hub

On a recent morning, Vinnie Lauria found himself weaving through the clogged, narrow streets of Ho Chi Minh City on a motorbike with his three-year-old son as they navigated the morning rush to school. Had he still been living in Silicon Valley the commute would have been less adventurous, but this was where the action was.

“Southeast Asia is going to be a global growth engine in the next 10 years and Vietnam will be at the centre of it,” said Lauria, sporting a ponytail and dressed tech casual in a printed shirt and white shorts.

For many Westerners, the enduring image of Vietnam is of a war-torn, impoverished nation where Nike makes its shoes. These days, coders are moving to the nation’s commercial hub of Ho Chi Minh City to launch start-ups focused on everything from insomnia to microloans. But becoming Asia’s next start-up hub will require overhauling existing regulations and navigating some hefty economic headwinds.

In 2021, Vietnam drew a record US$2.6 billion through 233 private deals, up from the US$700 million via 140 deals a year prior, according to a Google, Temasek Holdings Pte and Bain & Co report. Local firms are also competing with its Southeast Asian peers, accounting for 13 per cent of the total venture funding flows into the region after Indonesia and Singapore in 2021, according to Do Ventures.

Officials want more. By 2030, they aim to turn Ho Chi Minh City into a magnet for tech funding and target a digital economy that represents 40 per cent of the city’s gross domestic product. Last month, the government ordered city officials to prioritise attracting foreign investment to high tech projects while also offering other incentives to lure global talent and international firms to establish innovation research centres.