Vietnam Innovation & Private Capital Report 2025

0
May

1FOREWORDVietnam is entering a new era of growth, where innovation, science, and technology take center stage in shaping the country’s future. No longer just a rising player, Vietnam is now firmly positioned as a key destination for tech-driven investment in Southeast Asia, fueled by the ambition of our entrepreneurs and the strategic vision of our government.At the heart of this momentum is the landmark Resolution No. 57-NQ/TW, which charts a bold path for breakthroughs in innovation and national digital transformation. This policy underscores Vietnam’s commitment to building a knowledge-based economy where innovation serves as a catalyst for sustainable development and global competitiveness.In alignment with this vision, the Vietnam National Innovation Center (NIC) continues to strengthen its role as a driving force for Vietnam’s innovation ecosystem. By connecting startups, investors, and global partners, NIC offers a robust platform for emerging tech companies to accelerate their growth and seize opportunities in an increasingly competitive landscape.This year also marks a significant evolution of our annual report. Previously known as the Vietnam Innovation & Tech Report, co-authored by Do Ventures and NIC, this 2025 edition is now published under the title Vietnam Innovation & Private Capital Report -a joint effort between VPCA (Vietnam Private Capital Agency) and NIC, with collaboration from BCG. This expanded partnership elevates the report’s scope and depth, offering a comprehensive view of Vietnam’s private capital landscape across both venture capital and private equity.As Vietnam accelerates its transformation, we hope this report serves as a practical resource for investors, entrepreneurs, and policymakers navigating this dynamic market. Together, we can unlock new value, deepen partnerships, and solidify Vietnam’s position as a leading destination for innovation and private capital investment.Vu Qu oc HuyDirector,VietnamNationalInnovationCenter

2CONTENT1.Vietnam’s Economic & Digital Potential2.Vietnam Innovation & Private Capital Landscape3.Spotlight on Vietnam’s Emerging Sectors4.NIC’s Impact on Vietnam’s Innovation Growth in 20245.About VPCA6.About BCG7.About the Authors1234567

3With contribution fromResearch PartnersAV VMekong CapitalGolden Gate Ve n t u r e sVe r t e x Ve n t u r e sMonk’s Hill Ve n t u r e sThe Invention LabInsignia Ve n t u r e s PartnersAiVietVe n t u r eRed SquareCyberAgentCapitalEurazeoKoru CapitalOpenspaceVIGCentoNextransTNB AuraAntlerBeenextJungleTVS20in20PartnersABBKvisionITI FundVinaCapitalThinkzoneGenesiaVe n t u r e sPremier PartnersWave make r PartnersAngel CentralMomoMynaviKickstart Ve n t u r e sSKBAceCapitalVSV CapitalAltaraVe n t u r e sKrungsi

4Executive summaryVietnam is seeing strong and resilient economic growth for investors, supported by robust engines•Vietnam has experienced 6% annual real growth over last 10 years, outpacing peers and is expected to join World’s top 25 economy in the next decade.•Growth has been driven by export-oriented manufacturing and growing investment towards higher value products.Its unique macroeconomic situation presents multiple opportunities for investors•Vietnam is continuously gaining market share internationally in a context of supply chain repositioning. Leading global players are investing in manufacturing and delivery centers in Vietnam.•Local market is growing very rapidly with the rise of the middle and affluent population and the development of T2 cities, opening new markets.•Vietnam is in a super cycle of infrastructure investment.Environment is supportive for private capital•Government actively supports next economic breakthrough toward modernization, sustainability and innovation.•Financial infrastructures are maturing (PE/VC landscape, stock exchange, blockchain, etc.) and provide more visibility on future liquidity.Vietnam is at the forefront of the digital and AI revolution in Asia•Vietnam’s digital economy reached $36B and is projected to maintain double-digit growth, with strong government backing (Resolution 57), private investment, and a robust talent pipeline, Vietnam is on track to become the second-largest digital economy in SEA, contributing 30% of GDP in the near future.Vietnam offers multiple pathways for private capital to create value•Multiple pathways for private capital: partner with local champions to expand regionally, fund the next wave of champions, consolidate/modernize traditional industries, grow underpenetrated sectors, infra/PPP, etc.•Key success factors including leveraging local partnerships, investing in talent, building ecosystem, digital.12345

5Executive summaryThe market may have tightened, but deal-making stayed on course•Vietnam’s innovation & private capital market recorded $2.3B in 2024 across 141 deals, with deal count remaining relatively stable in both VC and PE despite a decline in capital deployed, highlighting investors’ continued engagement with Vietnam’s long-term potential.Smaller deals made a notable comeback•Early-stage VC activity showed signs of recovery, as $0.5M or smaller deals rebounded, reflecting sustained appetite for backing Vietnam’s next generation of startups.Resilient capital deployment in mature and sizable opportunities•Buyout transactions dominated, accounting for $1.7B of total PE investment, reflecting investor preference for mature, cash-generating businesses in a cautious environment.•Mid-sized deals ($100M–$300M) showed strong resilience, with capital invested rising 2.7x to $700M and deal count increasing, signaling improving investor confidence in sizable transactions.High-tech and sustainability sectors led the way forward•Sectors like Business Automation led VC deal value growth (562% surge), reflecting Vietnam’s increasing focus on productivity-enhancing technologies.•AI, AgriTech, and Green Tech sectors gained strong investor momentum, driven by digitalization, sustainability trends, and government support. AI funding surged 8x, while AgriTech grew 9x YoY.Investor participation showed strength in VC and remained steady in PE•Vietnam’s VC market attracted nearly 150 active investors in 2024, the highest since 2021, reflecting strong interest from domestic and regional players, especially Singapore and Japan.•In PE, the number of active investors in Vietnam remained on par with the previous year, with non-domestic GPs and corporate investors remained key players.678910

6Many opportunities for private capital to deploy in VietnamVietnam is at the forefront of the digital revolutionVietnam as a leading investment destination in AsiaVietnam’s Economic & Digital Potential

7Vietnam is at the forefront of the digital revolutionVietnam as a leading investment destination in AsiaMany opportunities for private capital to deploy in VietnamVietnam’s Economic & Digital Potential

8ChinaIndiaIndonesiaJapanMalaysiaPhilippinesRussiaBrazilSouth AfricaSouth KoreaThailandUnited KingdomUnited StatesVietnamSingapore6.24.84.7Av g 2024 -20353.02.44.21| Vietnam’s strong and resilient growth: GDP real growth reached 7.1% in 2024, poised to lead SEA growth•Vietnam’s economy has shown one of the strongest and resilient growth in the past 10 years in Asia, while maintaining moderate inflation•Vietnam is expected to outpace regional peers in the next decade, turning into one of the top 25 largest economies globally. Nominal GDP is projected to reach over $1,122B, x2.5vs. current size $459BSource: S&P Global, Oxford Economics, CEBR, BCG analysis PhilippinesIndonesiaMalaysiaThailandSingaporeAv g 2014 -2024Vietnam4.74.24.01.93.06.1ProjectionAvg CPI % (2014 –2024)Avg real GDP % (2014-2024)HighLowHighLowASEAN-6 CountriesASEAN –6 Average annual real GDP growth 2014 –2035 (%)Vietnam maintains a healthy balance between growth and inflation, ensuring economic stability

91| Growth has been driven by export-oriented manufacturing and growing investment towards higher value products•Vietnam has a diversified mix across sectors, which is progressively evolving from agriculture and low-tech manufacturing to higher-value manufacturing and services•Vietnam is gaining share in the export markets, historically in labor-intensive but relatively low value-added final assembly products and increasingly in high value-added products, leveraging technology, innovation, and skills to enhance productivity and competitiveness1: Net amount of taxes collected from production activities within the country, after subtracting any subsidies provided by the government to producers, representing the total tax burden on production within the economySource: GSO, World Bank, BCG analysis96194821723554382120142024Others¹Agriculture, forestry and fishingIndustry and constructionService234459’14-24 CAGR4.6%7.7%7.3%6.2%ServiceHigh-tech manu. (incl. electronics)Low-tech manu. (incl. textiles)Agriculture & other commodities199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020100020406080US-VN BilateralTrade AgreementWTOaccessionGlobalfinancial crisisUS-Chinatrade tensionsCPTPP tradeagreementExport (% of GDP)1997-2010: Commodities &low-tech manufacturing2010-2020: High-tech manufacturingExport is an important part of Vietnam’s GDP, with high-tech manufacturing as the main driverVietnam GDP structure 2014 –2024 (US$B)

102| Vietnam is gaining market share in global trade through cost advantage and innovation•Vietnam led ASEAN in global export growth (+0.5% share, 2017–2023), while Singapore, Thailand, and the Philippines declined•Supply chain shifts create opportunities, though trade wars and geopolitical risks persist. Vietnam maintains strong trade ties with the US, China, Korea, Japan, ASEAN, and the EU, with US exports quadrupling since 2013, accelerating post-2018 China tariffs. By 2035, policy stability, expanding FTAs, and deeper global integrationwill position Vietnam as a top emerging marketSource: GSO, HSC, S&P Global, BCG analysisKoreaJapanUSAEU27ChinaASEANVietnamTr a d e a m o u n t (US$B)Yo Y G r o w t h (%)20519.213521.58414.2827.6462.36917.4Width of arrow represents total change in trade flows 2023 vs 2024Color of arrow represents YoY growth (%) from 2023 to 202410%Tr a d e o f g o o d s f r o m 2 0 2 3-2024 between Vietnam and key countries

112| Vietnam is benefiting from the repositioning of the global supply chains, which materializes in steady FDI inflows•Vietnam attracts strong inflow from FDI from Asia-based and reputable investors, highlighting Vietnam as a strategic supply chain hub in Asia•In 2024, FDI disbursement reached $25B, marking a 9% increase YoYand contributing to a total ongoing FDI portfolio of $500B as of 2024•Recent developments, including policy reforms, regulatory enhancements, capital market initiatives are expected to support FDI acceleration1. Utilities include producing and distributing electricity, gas, water, air condition etc.Source: FIA, VIR, BCG analysis~42,000 FDI projects are ongoing, with accumulated value reaching ~$500B by the end of 2024, primarily from Asia-based investors (US$B)FDI growth reached ~7% ’19-24 CAGR, 84% of FDI fund was allocated to Manufacturing, Real estate, and Utilities14Netherlands14Thailand13MalaysiaSouth KoreaUS59Otherstotal85Singapore77Japan41Taiwan38HongKong32MainlandChina23BritishVirgin Islands9350312Examples61%15%8%16%Accumulated on-going FDI projects value till 2024 (USD Bn)503’19-24 CAGRReal estateUtilities1OthersManufacturing12.1%4.6%7.6%7.6%6.8%GamudaKeppel LandLotteLGIntelUnileverLegoFoxconnHondaSamsung

122| Local market is also growing rapidly, boosted by favorable socio-demographics and young and large labor force1. Program for International Student Assessment by OECD 2022 2. Monthly HH income (VND) Affluent: >30Mn, Established: 15-30Mn, Emerging: 7.5-15Mn, Aspirant: 4.5-7.5Mn, Poor: <4.5MnSource: CIA.gov, OECD Education GPS, WB, CCI, Oxford Economics, BCG analysisYo u n g a n d l a r g e l a b o r f o r c e , g r o w i n g s k i l l u p l i f t w i l l benefit for businesses Rising Middle & Affluent Class (MAC) expand consumer markets•Vietnam ranked 2ndin SEA with largest labor force•Vietnam workforce also benefits from a very strong education system, reflected by latest PISA1results. For key subjects like math, Vietnamese students scored on par with OECD countries (469 vs 472)•Vietnam is on track to become an upper-middle-income country by 2030, with the affluent and middle class projected to reach 45%+ of the population. Affluent will grow double digits with the lowering in Aspirant and Poor bands20401600050100Labor force 2023 (millions)Labor force participant rate 2023 (%)70.0%Indonesia74.0%Vietnam61.4%Philippines66.9%Thailand65.7%MalaysiaCambodia69.4%Singapore65.9%Laos1435649411894379.9%Wealthbands22022Pop2030F Pop’22-30CAGRAffluent8M (8%)17M (16%)11.5%Established27M (28%)31M (30%)1.5%Emerging32M (33%)37M (36%)1.9%Aspirant15M (15%10M (9%)-6.0%Poor16M (16%)%9M (9%)-7.9%Total population (Mn)Total Affluent, Established (Mn)(% of total pop)9810335(36%)48(46%)

132| Tier 2 cities/provinces such as Bac Ninh, Khanh Hoa, Can Tho present significant growth opportunities with MAC expansionNotes: MACs –Middle and affluent classesSource: BCG Vietnam wealth and population model, BCG geoanalytics, Resolution No. 81/2023/QH15Number of cities/provinces with MAC population bucketsMAC population/Province 51523207212411Over 1,000K500K –1,000K250K -500KBelow 250K+2+6+1-920242030Hanoi, Bac Ninh, Hai Phong & Red River DeltaBenefit from the expansion of industrial areas and increased FDI investment in new plantsDa Nang & Central coast Focus on ICT, tourism, logistics, and attract more FDI, with Da Nang takes the major share of MAC in Central Vietnam Can Tho & Mekong areaCenter for services, tourism, logistics, and agriculture-focused industriesHo Chi Minh & Southeast region Leading hub in Vietnam and SEA for economy, services and innovationHighland & Khanh Hoa, Binh ThuanPromote agro-forestry processing, renewable energy, sustainable industry, and eco-cultural tourism’More than 1,000K MACs 500K –1,000K MACs200K –500K MACsBelow 250K MACs2030 MACsThe number of cities/provinces with a MAC population of over 500K will rise significantly from 20 to 28 between 2024 and 2030Tier 2 cities/provinces will experience strong growth potential with a significant rise in MAC over the next five years

1420231203020502| Supercycle of government investment in infrastructure, especially transportation and energy, supporting sustainable growthStrong investment in transportation infrastructure, enhance connectivity and trade efficiencyScaling renewable capacity for long-term sustainability1. For 2023 data, the total of solar and wind is currently listed under solar (27%) due to lack of break-down data2. Includes co-generation, converted coal, stored power & flexible power sourcesSource: National Dialogue “Green Transport Development: Challenges and Solutions to Attract Investment Resources” 2024, DecisionNo. 12/QĐ-TTg, Press search, EMIS infrastructure report, EVN (2023 data), PDP VIII Decision 500/QĐ-TTg, BCG analysisVietnam is undergoing a major infrastructure expansion, with investment planned until 2050 across 5 key transportation sectorsPrivate investment in infrastructure is encouraged, driven by new laws promoting Public-Private Partnerships Vietnam is accelerating its renewable energy expansion to ~70% by 2050, up from 27% in 2023, with a focus onsolar and wind projects. Simultaneously, the country is reviving its nuclear energy program, targeting completion by 2030 to strengthen long-term energy security and sustainabilityTo t a l i n v e s t m e n t i n t r a n s p o r t a t i o n i n f r a s t r u c t u r e u n t i l 2 0 5 0 (US$B)Vietnam installed power capability in PDP VIII (GW)24.833.6North-South Expressway (East, West), Ring ways4.26.7Major ports in Can Gio, Van Phong, Tran De17.121.1Long Thanh International airport151.2312.0North-South Express railway and urban railway10.84.5Waterway transport in Central VN, Mekong Delta2083782021 -20302031 -2050Key projectsTo t a lRoadOceanAirRailWat erwayRenewable energy targets 2030: 30.9–39.2% 2050: 67.5–71.5%490-573150.580.6Coal, Gas, LNG,Import and othersSolar, Wind, Hydropower, Biomass & Ammonia-fired/Waste to energyPDPVIII Target

153| Vietnam government actively supports next economic breakthrough toward modernization, sustainability and innovation through many open policies•Vietnam’s National Master Plan (2021-2030, Vision to 2050)is set to transform the country’s economic growth by prioritizing three key pillars: Digital Economy, Green Economy, and Hi-tech Economy•This strategic shift moves Vietnam from a labor-intensive, resource-dependent model to one driven by innovation, talent, and sustainability. By enhancing infrastructure, fostering scientific and technological advancements, and developing economic corridors, Vietnam aims to become aregional top-tier economy with a strong commitment to green and sustainable growthSource: Resolution No. 81/2023/QH15, Decision No. 569/QD-TTg, BCG analysisThree key areas of Vietnam’s economic modelVietnam’s economic shift: From traditional to future-ready growthPast growth drivers rely on …High-tech economyPrioritize innovation and high-tech industries, fostering AI, semiconductor production, and smart manufacturing to enhance global competitivenessDigital economyAccelerate digital transformation by expanding digital infrastructure, promoting e-governance, and integrating advanced technologies to build a digital-driven economyGreen economyCommit to a sustainable development by investing in renewable energy, circular economy practices, and climate resilience to achieve its NZE target in 2050Future growth imperativesLabor-intensiveindustries relying on low-cost workforce advantagesStatic forces such as cheap labor and natural resource extraction, limiting long-term sustainabilityDepleting and polluting industrial practices, creating environmental and social challengesTa l e n t-driven development, investing in education, upskilling, and high-value industriesDynamic economic forces, focusing on technology, digital transformation, and innovationA s us t ainable dev elo pm ent m o del, integrating green initiatives and environmental responsibility into economic policies

163| Ongoing trajectory towards Investment Grade with several upsidesfor investors Source: CEIC, HSC, IMF, BCG analysisStrengthening sovereign credit ratings and advancing towards Investment grade•Vietnam’s sovereign credit rating has demonstrated consistent improvementover recent years, transitioning from a highly speculative rating to Non-investment grade speculative and towards the Investment grade•This trajectory is key to attract foreign capital, lower borrowing cost, improve domestic investment climate and enhance market confidenceLow reliance on external debt enhances economic resilience and reduces vulnerability to shocksPhilippinesIndonesiaVietnamThailandMalaysia29%30%33%39%68%ASEAN-5 External Debt/GDP, 2023Prime InvestmentAAAAaaAAAHigh Investment GradeAA+Aa1AA+AAAa2AAAA-Aa3AA-Upper Medium Investment GradeA+A1A+AA2AA-A3A-BBB+Baa1BBB+Lower Medium Investment GradeBBBBaa2BBBBBB-Baa3BBB-Non-Investment Grade SpeculativeBB+Ba1BB+BBBa2 BBBB-Ba3BB-Highly SpeculativeB+B1B+B B2BB-B3B-Substantial RisksCCC+Caa1CCC+Extremely SpeculativeCCCCaa2CCC2022/20232019/20202017Rating year

173| Financial infrastructures are also improving rapidly offering new pathways for investorsSource: Resolution No. 259/NQ-CP; Decision No. 1236/QD-TTg; Circular 68/2024/TT-BTC; Law on Real Estate Business 2023, Law on Housing 2023, Law on Bidding 2023, LandLaw 2024, Law on Securities 2024, Decree No. 96/2024/ND-CP, Press search, BCG analysisImplications Notable Government’s initiatives•Plan for the establishment of an international financial center in HCMC and a regional financial center in Da Nang, aiming to enhance global financial connectivity and attract foreign institutionsEstablish International Financial Centers•Establish the National Strategy for Blockchain Application and Development, with objectives to develop a national blockchain infrastructure, encouraging blockchain applications in finance, logistics, agriculture, data managementSet upNational Blockchain Strategy•Amend key laws on land and real estate to address legal bottlenecks and facilitate smoother project implementation•Mandate state intervention if real estate prices increase by more than 20% over three monthsReform Real estate market•Boost market access and transparency and amend Law on Securities enhances foreign investor access, market protections (IPO, Delisting criteria), and transparencyUpgradeStock market•Strengthen the local and foreign investor ecosystem to boost capital flows and innovation through key organizations such as NIC and VPCA, while driving increased startups participation in tech and digital sectors with strong incentives and supportDevelop investor ecosystem1Enhance Vietnam’s position as a regional financial hub and attract stronger capital inflows by crafting unique incentives and attractive business conditions and improve market liquidityProvide a clear regulatory framework to attract investments for blockchain without regulatory risks and encourage innovation in blockchain-based services and solutionsForeign investors gain equal access to market info, easier entry, lower costs, and reduced risks, enhancing Vietnam’s market appealAdvance Vietnam stock market re-classification from frontier to emerging market status by MSCI and FTSE, expected to happen by late 2025Real estate market to be under control, curb speculation, enhance investment environment and protect socio-economic stabilityEnhance collaboration, help mobilize diverse capital sources, and accelerate startup and tech sector growth23456

18Vietnam is at the forefront of the digital revolutionVietnam as a leading investment destination in AsiaMany opportunities for private capital to deploy in VietnamVietnam’s Economic & Digital Potential

194| The digital economy is positioned as a key driver of Vietnam’s economic growth•Vietnam is prioritizing the digital economy to drive its economic growth, positioning itself as a leading player in SEA•According to MIC, Vietnam’s digital economy is growing 20% annually,and is estimated to contribute 18.3% to GDP in 2024. By 2030, the digital economy is projected to contribute 30%-35% of GDP, with Vietnam aiming to enter the top 30 globally in digital economy contribution, up from 41st todayDigital economy contribution to GDP Vietnam vs. SEA peersRobust digital adoption landscape of Vietnam20222023202420252030 Ta r g e t202114.316.518.320.030.011.9Prime Minister Pham Minh Chinh, 10th meeting of the National Committee on Digital TransformationInternet penetration rate in 2023SEAVietnam70%79%SEAVietnam40%45%Internet users who use social media for work purposes in 2024SEAVietnam40%77%Shopped via Live Streaming3 in 2023SEAVietnam+77%+83%Plan to use cashless payments more often”The theme of digital transformation for 2025 is Comprehensive digital transformation for digital economy development, creating new drivers for economic growth…””I think the timing is perfect for Vietnam to jump into the age of AI… our company will advance Vietnam’s AI by building AI infrastructure, growing the number of AI experts in Vietnam and supporting AI startups…”CEO of a world leading developer of GPUsDigital economy contribution to Vietnam GDP (%) 18.3%…vs. SEA peers8.4%223.0%222.0%116.0%11. VCCI 2. trade.gov data for Malaysia, Philippines3. Live Streaming via platforms such as TikTok and Shopee Source: MIC 2024 report, 10th meeting of the Vietnam National Committee on Digital Transformation, trade.gov, SEA Consumer Sentiment Study 2023,Statista, VISA CPA report, Press search, BCG analysisVietnamMalaysiaPhilippinesThailandSingapore

20Establishing smart infrastructureEducation and talent developmentGovernment direction and supportPrivate sector investment and innovation4| Digital economy has been driven by a robust and interconnected ecosystem1. Tax exemption up to 4 years with 50% reduction in 9 years with conditions (Cir 03/2021/TT-BTC) vs normal CIT rate at 20%Notes: MPI: Ministry of Planning and Investment; MIC: Ministry of Information and Communication, MoST: Ministry of Science and Technology, NIC: National Innovation Center, VCCI: Vietnam Chamber of Commerce and IndustrySource: Decision 36/QĐ-TTg; Acclime x UOB, MPI, MIC, MoST, Ookla, ESCAP, Mordor Intelligence, Research and Markets, MOET report,NIC survey, BCG analysis•Numerous regulations supporting digital areas like data governance & AI, recent highlight with Resolution 57-NQ/TW on science, tech, innovation & digital transformation•Favorable tax incentives, land rent support, and government grants are accessible to support high-tech and digital businesses1•Va r i o u s i n i t i a t i v e s f r o m government bodies such as MPI, MIC, MoST and associations (e.g., NIC, VCCI). A key initiative, the National Digital Tr a n s f o r m a t i o n P r o g r a m , accelerates this journey•Corporate-led digitalization: Strong tech adoption in finance, telecom, and trade, backed by emerging Corporate Venture Capital (CVC) funding•Te c h F D I & R & D g r o w t h : High-tech FDI in AI, semiconductors, & electronics, with Nvidia recent investing in AI R&D & data centers•Startup & Innovation: Vietnam ranks 44/133 in the Global Innovation Index, with a dynamic digital ecosystem 4,000+ start-ups•PE & VC ecosystem: Increasing private equity and venture capital activity, fueling growth-stage investments and exits.•Growing data centers establishment driven by local and global investments, with a projected 10.8% CAGR growth until 2028•Establish high-tech digital parks and smart city projects to enhance infrastructure•Fast, affordable internet: Ranked 35/154 for broadband speed and 21/237 for cost-effectiveness, with significant speed improvements supporting digital growth•Strong IT Workforce: Vietnam has 500,000 IT engineers, with 50,000–60,000 graduates annually from 165 institutions offering IT programs (10 with AI curricula)•Competitive IT salaries ($700/month, ~50% lower than Malaysia, 30% lower than Thailand)•Strong digital upskilling awareness: 52% of employees prioritize digital skills, exceeding the APAC average, reinforcing Vietnam’s position as a digitally agile workforce1MBusinesses will be digitally transformed by 202687%Digital adoption in businesses10.8%Data Center CAGR until 2028500KIT workforce with 50-60K fresh graduates annually

21A h i g h-growth digital economy•The digital economy contributing 30%of GDP, with 50% of total exports coming from high-tech products•To p 3in ASEAN and top 50 globally in digital competitiveness & e-Government•AI leadership: Vietnam to be a top 3 AI R&D hub in ASEAN•Attract3+ global tech giants for R&D and manufacturing•80% cashless transactions, driving fintech and digital payment growth, 80% of the population using digitalpublic services•5+ leading Vietnamese tech firms at a global level•2% of GDP allocated to R&D, with 60% fromprivate investment•Strong infrastructure, strategic ownership of key tech, smart cities•State-wide digital governance in placeA l e a d i n g i n n o v a t i o n h u b•50% of GDP from the digital economy, making it a top global tech hub•To p 3 0 globally in innovation & digital transformation•Attract additional5+ global tech giants for R&D and manufacturing•10+ leading Vietnamese tech firms at a global level4| Resolution No. 57 is the North Star for Vietnam in itsSci-tech development, innovation, digital transformation•Signed on Dec 22, 2024, Resolution No.57-NQ/TW is considered a breakthrough policy. Compared to Resolution No.10, which focused on agriculture and poverty reduction 40 years ago, this resolution now extends to science, technology, innovation, and digital transformation.Source: Resolution No.57/NQ-TW, Press search, BCG analysis“Resolution No.57 can be considered a “Resolution to liberate scientific thinking”, “Resolution to implement other resolutions”, and “Resolution of action” with very specific goals to promote breakthroughs in the science and technology development, innovation and digital transformation, thereby creating a foundation for strong development of the country in the new era…”Key targets (non-exhaustive)By 2030By 2045

22Mindset shift & leadership commitment•Strong political commitment to Science, Technology, and Innovation (STI), embedding digital transformation in policies, corporate strategies, and public servicesRegulatory & institutional reforms•Remove legal barriers, streamline intellectual property, investment, and procurement policies, and encourage pilot programs for emerging tech and VC fundingInfrastructure & technological advancement•Invest in AI, 6G, semiconductors, quantum computing, and IoT; expand smart cities, cloud, and big dataTa l e n t & h u m a n c a p i t a l d e v e l o p m e n t•Strengthen STEM education, attract global talent, and enhance public-privateR&D collaborationDigital transformation in governance & security•Fully digitalized government operations and public services. Develop secure digital platforms and enhance cybersecurityBusiness & startup growth acceleration, global integration•Incentives for SMEs and startups in digital innovation•Develop industrial zones dedicated to high-tech manufacturing, positioning Vietnam as a regional tech hub through global partnerships and FDI attraction•Expanding cooperation in key areas such as Al, biotech, semiconductors, and energy 4| Resolution No. 57 defines strategic priorities for Vietnam’s digital and innovation-led futureKey strategic actionsSource: Resolution No.57/NQ-TW, Press search, BCG analysisKey insightsSignificant investment opportunitiesin technology, infrastructure, capital, and cross-border partnershipsVa r i o u s o p p o r t u n i t i e s in key tech areas such as AI, semiconductors, data centers, 6G and digital infrastructure, with govt. incentives for investmentLower entry barriers, increased incentives and support for startups, R&D, and digital enterprisesExpansionin high-tech parks, smart cities, and cybersecurity, creating new investment avenuesWorkforceenhancement making Vietnam an ideal tech hubVietnam is positioning itself as a regional leader in innovation, driving M&A, joint ventures, and cross-border investments12345

234| Digital benefits across all industries with the rise of local digital champions (1/2)Source: GSO digital economy report in 2025, MIC, SBV, Euromonitor, Visa, Press researchTo p w o r l d w i d e#2 smartphone export#5 computer component export#7 in software outsourcing80%+ICT export revenueDouble digit growthICT revenue32%Vietnam’s value-added contribution in ICT revenue 2024 (2019: 21%)•Vietnam’s top technology firms are expanding into Korea, Japan, US, APAC, and Europe (e.g., FPT’s global IT services revenue surpassed $1 billion, with a $5 billion target by 2030)•Vietnam’s data center market is expected to grow at 10%+ CAGR by 2030. There are 33 data centers in Vietnam by 1Q2024; 4 major domestic players (VNPT, Viettel, FPT, CMC) currently takes up 97% of the marketExamples local champions•Financial service sector is at the forefront of national digital transformation, with contributions from SOEs, private banks to fintech. New techs (e.g., AI, cloud computing) were applied to uplift from front-end to back-end•Domestic players (e.g., Napas, VNPay, Momo, ViettelPay, and ZaloPay) are accelerating cashless payments in Vietnam$1.3BData center market size by 2030Cashless payment transaction volume increased in 2024QR transactions grew in 2024. SBV recently signed a cross-border payment agreement with five ASEAN countries enabling QR Code-based retail transactions90%63%2XBanking transactions conducted via digital channels. Basic banking services have been fully digitalizedFPTViettelVNGCMC CorpVNPTVietcombankMBbankTe c h c o m b a n kVPbankNapasVNPayZaloPayViettel PayMomoFinhayMoving from ICT outsourcing to innovation, fueled by the “Make in Vietnam” initiativeAccelerating financial service digital transformation & Cross-border transactions

244| Digital benefits across all industries with the rise of local digital champions (2/2)1: Penetration rate: percentage of surveyed consumers who use each ride-hailing platformSource: Euromonitor, VietData, Allied Market Research, Mordor Intelligence, Decision Lab, Press research•As e-commerce demand grows, local logistics players are expanding operations, infrastructure investments and digitalization to enhance last-mile delivery and efficiency•Vietnam’s express delivery market is projected to reach $4.88B by 2030 (~ ’22-30 CAGR of 24%). Viettel Post is leading the sector with 17% market share by adopting advanced technology to optimize supply chainExamples local champions•Xanh SM and Be are reshaping the landscape of Vietnam’s e-ride hailing market, pushing foreign competitors into intense competition. Xanh SM has risen to No.1 in the technology taxi sector, capturing 37.4% of the market share in Q4 2024, with 100% electric vehicle fleet and better customer servicesGrabXanhSMBe68%64%62%68%21%32%36%44%23%24%20%22%0%+110%-4%Q4 2023Q1 2024Q2 2024Q3 2024To p p l a t f o r m s f o r r i d e-hailing –Penetration rate1(%)Viettel PostGHTKVNPostGHN16%17%15%14%20%14%5%8%20222023Strong growth in retail e-commerce (Sales value excludes sales tax -US$B)Express delivery market share2023 vs 2022202020242028 Forecast82145X2Viettel PostGHTKGHNXanhSMBeA s t r o n g l o c a l p r e s e n c e i n l o g i s t i c s , f u e l e d b y a h i g h-potential e-commerce marketVietnam’s ride-hailing & taxi market to reach $2.56B by 2030, with local players gaining traction

254| Vietnam is emerging as a leading hub for investment and AI startups in the region, with its economy projected to gain up to $120B in benefits from AI1.AI’s impact on Vietnam’s economy is estimated based on contribution to revenue growth and cost savings by improving labor productivity. In particular, this estimate is based on a forecast on the size of GDP of sectors in Vietnam in 2040, AI revenue impact rate according to BCG analysis, along with industry-specific cost savings rates published by the OECD. The figure is calculated using real 2015 USD exchange rateSource: Pitchbook, GenAI Startup 2024 report, BCG analysisFund raised by AI start-ups until 2024 (US$M)Share of GenAI start-ups by country in ASEAN 780654585240113SingaporeVietnamMalaysiaIndonesiaThailandPhilippines8,82044%27%6%13%7%3%25-30Manufacturing15-20Consumer products10-15Financial services10-14Telcom10-15Education7-10Environment & Agriculture35-40Other sectors120-130Total impactVietnam’s AI startups are gaining momentum, surpassing regional peers to rank 2nd in SEAAI is projected to contribute over $120B to Vietnam’s economy by 2040 (US$B)

26Vietnam is at the forefront of the digital revolutionVietnam as a leading investment destination in AsiaMany opportunities for private capital to deploy in VietnamVietnam’s Economic & Digital Potential

27Several opportunitiesfor private capital to deploy in VietnamFund the next wave of champions, particularly in the blooming local tech sceneBuild local delivery capabilities (e.g., IT services) or manufacturing capabilities to serve local and international marketsBuild the new-gen enablers(e.g., logistics, education)Support the growth of underpenetrated sectors (e.g., private healthcare)Invest to modernize some traditional industries (e.g., highly fragmented, labor intensive), by financinginnovative SMEsAddress the needs of the rising middle and affluent class, in HCMC, Hanoi and the next wave of T2 citiesPa r tne r wi th l oca l cha m pi ons to e xpa nd locally and regionallyInvest in the development of new infrastructures (e.g., Data centers, transport), participate in PPP

285 | Many industries for investors to consider in Vietnam Source: BCG analysisInfrastructure & Logistics Services and retailHi-tech manufacturingGreen industriesHeavy Industry•Tr a n s p o r t i n f r a . : r o a d , rail, airports•Industrial infrastructure•Logistics hubs development incld. port, cold chain storage and haulage•Financial Services, Healthcare, Education, Business/IT•Strong local demand, with potential to scale regionally in SEA•Electronics, semiconductor, pharmaceutical, medical devices manufacturing•Attractive niches/ platforms opportunities•Government willing to develop higher value sectors•Renewables, Gas, Grid development•Green tech manufacturing (solar panels, battery, EV)•Green services and solutions•Chemicals/ PetChems with limited local production capability and continuous demand expected•Other heavy industry: building materials, Aluminum Global hub potentialRegional hub potentialMainly local market focus

295 | Several success factors for private capital investors in Vietnam•Look for sectors which are the coreof Vietnam’s future development (local market and export)•Leverage existing incentive scheme for key strategic areas•Leverage expertise and knowledge of local partners•Strategic partnership•Pa r tne r shi pwith investors•Digital during the deal sourcing andthe due diligence, including through alternative data (e.g., social networks)•Digital as part of value creation through digital transformation•Invest in staff learning and development•Pa r tne r wi thlocal universities•Create a solid & integrated foundation for operation•Key value chainsteps progressive developmentInvest instrategic areasEstablish stronglocal partnershipsInvest in talent developmentBuild a local ecosystemLeverage digital

30Private Equity LandscapeVenture Capital LandscapeVietnam Private Capital Landscape at a GlanceVietnam Innovation & Private Capital Landscape

31Private Equity LandscapeVenture Capital LandscapeVietnam Private Capital Landscape at a GlanceVietnam Innovation & Private Capital Landscape

32Vietnam’s innovation & private capital market at $2.3BSource–Preqin, Mergemarket, Pitchbook, Capital IQ, DoVentures, NIC$443$874$451$634$529$398$807$6822013$462014$452015$1052016$4820172018201920202021202220232024$1,078$853$1,959$20$2,623$3,426$4,759$2,149$4,573$2,691$3,487$2,255$1,058$1,914$2,575$2,982$3,885$1,698$3,131$1,442$2,057$2,958$1,856$787VCPE3560667186107167139202165147141Number of dealsVietnam’sprivatecapitalmarketcontracted35%in2024to$2.3Bacross141deals.Whilecapitaldeploymentslowed,dealcountremainedrelativelystableinbothVCandPE,underscoringinvestors’continuedengagementwithVietnam’slong-termfundamentalsandmarketpotential.Capital invested (US$M)

33A d e c a d e o f s h i f t s i n Vi e t n a m ’s p r i v a t e c a p i t a l m a r k e tSource–Preqin, Mergemarket, Pitchbook, Capital IQ, DoVentures, NIC$46$105$443$874$451$634$529$807$6822014$45201520132016$482017201820192020202120222023$3982024$1,078$853$1,959$20$2,623$3,426$4,759$2,149$4,573$2,691$3,487$2,255$1,058$1,914$2,575$2,982$3,885$1,698$3,131$1,442$2,057$2,958$1,856$787VCPENumber of dealsVietnam’sprivatecapitalmarkethasexperienceddistinctphasesoverthepastdecade.Followingaformativeperiodthrough2017,themarketacceleratedsharply,peakingin2019.TheCOVID-19shockdisruptedthismomentum,slowedlargePEdealswhileVCactivityremainedresilient.Morerecently,themarkethasenteredacorrectionphase,markedbyincreasedinvestorselectivityandsoftercapitalflows.Capital invested (US$M)FormationAccelerationPandemic DisruptionMarket Correction3560667186107167139202165147141

34A d e c a d e o f s h i f t s i n Vi e t n a m ’s p r i v a t e c a p i t a l m a r k e t | Acceleration Phase (2017-2019)Source–Preqin, Mergemarket, Pitchbook, Capital IQ, DoVentures, NICRapidgrowthindealvolumeandsize,peakingin2019at$4.8Bacross167deals.StrongmacrotailwindsandrisinginvestorconfidencemarkedVietnam’semergenceasamaturingmarket.Notable dealsCompanySectorInvestorDeal sizeYe a rCommercial ServicesKKR$150M2017EducationEQTundisclosed2017Financial ServicesWarburg Pincusundisclosed2018Financial ServicesGIC, Softbank Vision Fundundisclosed2019Commercial ServicesMPM Investments Pte. Ltd.$131M2019RetailGIC$500M2019Commercial ServicesFitness & Lifestyle GroupTopco Pty Ltdundisclosed2019Capital invested (US$M)$443$874201720182019$2,623 $48$4,759 $2,575$2,982$3,885$3,426 Number of deals86107167VCPENote: Transactions with undisclosed values are included in the dataset, although their deal sizes were not publicly disclosed.Masan MEATLifeILAMomoVNPAYMinh PhuThe CrownXCMG Asia

35A d e c a d e o f s h i f t s i n Vi e t n a m ’s p r i v a t e c a p i t a l m a r k e t | Pandemic Disruption Phase (2020-2022)Source–Preqin, Mergemarket, Pitchbook, Capital IQ, DoVentures, NICCapitalslowed,butdealvolumeremainedstable.VCactivity,peakingat$1.4Bin2021,helpedoffsetaPEslowdown.TheperiodhighlightedinvestorbeliefinVietnam’slong-termfundamentalsdespiteglobaluncertainty.Notable dealsCompanySectorInvestorDeal sizeYe a rCommercial ServicesMirae Asset -Naver Growth Fund, Taiwan Mobile, STIC$258M2021RetailAlibaba Group Holding Limited, EQT Private Capital Asia$400M2021EducationKKR$100M2021Financial ServicesMasan$65M2022EducationEQuest, KKR, TAEL Partners$100M2022Commercial ServicesSeaTown Holdings International, Periwinkle Pte Ltd., Temasek Holdings$234M2022HealthcareCVC Asia Pacific Ltd$177M2022$451$63420212022$2,149$4,5732020$1,698$3,131$1,442$2,057$2,691Number of deals139202165VCPENote: Transactions with undisclosed values are included in the dataset, although their deal sizes were not publicly disclosed.Capital invested (US$M)TIKIThe CrownXEQuestTrusting SocialKhoi NguyenGolden GatePhuong Chau

36A d e c a d e o f s h i f t s i n Vi e t n a m ’s p r i v a t e c a p i t a l m a r k e t | Market Correction Phase (2023-2024)Source–Preqin, Mergemarket, Pitchbook, Capital IQ, DoVentures, NICGlobaltighteningandvaluationresetsdrovea35%dropinVC-PEinvestmentto$2.3Bin2024.Investorsadoptedaselectiveapproach,prioritizingfundamentalsandresilientsectors.Notable dealsCompanySectorInvestorDeal sizeYe a rEducationKKR$120M2023RetailGrowtheum Capital Partners$100M2023HealthcareThomson Medical Group Limited$381M2023Financial ServicesSiam Commercial Bank$822M2024AgricultureHSBC, Lendable, AVV, TNB Aura$28M (+$42M in debt financing)2024HealthcareUOB Ventures, Cocoon Capital, SmileGate Investment, DFC$51.5M2024TechnologySumitomo Corporationundisclosed2024Note: Transactions with undisclosed values are included in the dataset, although their deal sizes were not publicly disclosed.$529$3982024$3,487 2023$2,985$1,856$2,255 Number of deals147141VCPECapital invested (US$M)EQuestIDPFV HospitalHome CreditTechcoopBuymedRikkeisoft

37Venture Capital LandscapeVietnam Private Capital Landscape at a GlancePrivate Equity LandscapeVietnam Innovation & Private Capital Landscape

3892142313059126105165134122118Investment in Vietnam’s tech ecosystem declined in 2024, but deal volume remained resilientCapital invested and deals doneIn2024,totalcapitalinvesteddroppedto$398M,markinga24.7%declinefrom2023.Thenumberofdealsalsofellto118,continuingthedownwardtrendfrompreviousyears.Thissuggestsamorecautiousinvestmentlandscape,possiblyduetoglobaleconomicuncertainty,withinvestorsfocusingonselectivedealsratherthanbroadfunding.Note: Investment totals reflect a broad range of financing activity in technology companies. Certain non-VC events like venture debt, project financing, and corporate spin-offs are also incorporated, while digital token fundraising remains excluded from these figures.Source–DoVentures, NIC$443$874$451$634$529$398$462014$452015$1052016$4820172013201920202021202220232024$1,4422018Capital invested (U$M)# of Deals

39$169$286$253$171$471$310$101$274$588$198$163$219$2982013$28$182014$21$232015$55$502016$40$82017201820192020$1,2712021202220232024451292121131820103464624560798664705963576125Investment rebounded in H2 2024Capital invested and deals doneInH22024,capitalinvestedsurgedto$298M,markinga3xincreasefromH1andsignalingrenewedinvestorconfidence.Moreover,H2dealvalueregistereda36%year-over-yearincreasecomparedto2023,highlightingsustainedmarketmomentum.Source–DoVentures, NIC# of DealsCapital invested (US$M)

40$7920132014201520162017$1452018$3012019$1082020$2262021$2232022$1922023$17920243104121188$3$4$3$3$7$13$12$10$9$8$12201320142015201620172018201920202021202220232024Smaller deals made a sharp comebackIn2024,$0.5Morsmallerdealsrebounded,withdealcountincreasingto57afteradipin2023,showingthebouncebackofearly-sizeticket.$3M-$50Mchecksizeremainedstable,signalingthatearly-stagedealsfrompreviousyearssuccessfullyraisedfollow-onfunding.Source–DoVentures, NIC$0.5M or smaller deals$0.5M+ to $3M deals$3M+ to $10M deals$10M+ to $50Mdeals$50M+ deals31432171834535951443357$11$29$62$40$114$86$73$592013201420152016$820172018201920202021202220232024$17$39$20$13$37$11$65$80$88201320142015201620172018$11220192020$1322021$11620222023202413$6020132014201520162017$2512018$3862019$2262020$9602021$1902022$1542023202433352213269617417355473928353262192422121311Capital invested (US$M)#of Deals

4112332017371564106102968091225284021152381281310510201333120146302015602201623201724201820195320207202165202232023220241Median deal sizes shrank across stagesIn 2024, median deal sizes declined across all funding stages. Series B, which experienced a peak of $26M in 2021, dropped sharply to $10M, continuing a two-year downward trend. Series A also fell to $2M, the lowest level since 2018, while Pre-A f u n d i n g d i p p e d to $0.3M. Source–DoVentures, NIC Deals done by series, #Median deal size by series, US$MPre-AAC+B201420152016201720182019202020212022202320242013$0.2$0.0$2.0$0.1$0.2$2.0$2.0$0.4$3.0$0.2$0.1$0.2$10.0$1.0$15.0$1.0$1.0$15.0$0.3$2.0$10.0$5.0$1.0$4.0$1.0$6.0$1.0$5.0$4.0$3.0$1.0$3.0$5.0$26.0$6.0$6.0ABPre A

42Business Automation took the lead in VC fundingIn 2024, Business Automation dominated in deal value, soaring to $84M -a remarkable 562% surge. Agriculture emerged as the second most invested sector, growing 857%. Financial Services followed as the third most invested sector but saw a sharp 61% decline, likely due to market saturation and shifting investor focus.Notes:For a detailed definition of each sector, please see our methodology slide.Source–DoVentures, NICCapital invested by sector2013201420152016201720182019202020212022202320242023-2024ChangePayments12 10 1 29 10 100 300 101 450 30 –Retail1 15 1 18 15 105 195 83 469 204 33 37 13%Employment-0.0 0.2 0.1 0.0 1 3 36 4 3 10 –100%Real estate and infrastructure1 -0.1 -7 6 16 26 29 10 1 11 846%Financial Services-0.0 1 2 0.0 3 40 25 61 214 149 58 -61%Business Automation–0.1 -0.0 1 60 18 55 15 13 84 562%Local services0.2 0.1 4 2 0.2 4 5 10 4 4 -6 Travel and hospitality-1 0.4 4 1 5 23 9 4 0.2 3 –100%Education0.2 3 6 1 5 53 32 8 55 32 67 27 -60%Entertainment / Gaming—–0.3 9 6 175 10 13 –100%Logistics–0.3 1 -5 58 4 8 10 0.2 0.1 -50%Healthcare–0.1 -0.2 0.2 12 3 37 37 184 46 -75%Entertainment / Non-Gaming–0.1 —1 2 10 5 9 23 160%Advertising and Marketing Technology6 7 30 1 6 3 15 2 -1 1 2 221%Comms & communities-0.2 —0.0 -1 7 1 -2 Multi-vertical——29 -42 —Agriculture2 8 74 857%Green Tech0.4 3 17 25 23 -8%Others–0.2 —–30 41 14 5

43$10$8020232024Notable AI StartupsNotable AI InvestorsAI’s expanding role in Vietnam’s tech ecosystem•TheVietnameseAIstartuplandscapeexperiencedasubstantialsurgeininvestmentin2024,asevidencedbythesharpincreaseincapitalinflows.To t a lfundingforAIstartupsrosefrom$10Min2023to$80Min2024,representingan8xincrease.•Beyondautomation,AIisrapidlyexpandingintosectorslikefinance,healthcare,ande-commerce,drivingsmarterdecision-makingandoperationalefficiency.Withincreasinggovernmentsupport,agrowingtalentpool,andrisingenterpriseadoption,Vietnam’sAIecosystemispoisedforsustainedgrowth,shapingthefutureofitstech-driveneconomy.AI Funding in Vietnamese StartupsCapital invested (US$M)Source–DoVentures, NIC#of DealsVinBrainEureka RoboticsNamiTechPresightEarableReforged LabsPalexyAV VDo VenturesTVSB CapitalGoodwater CapitalY Combinator

44$8$7420232024A n e w w a v e o f i n v e s t m e n t i n A g r i c u l t u r e•Vietnam’sagriculturesectorhaswitnessedaremarkable9xincreaseinfunding,withtotalinvestmentsurgingfrom$8Min2023to$74Min2024.•Thesignificantuptickincapitalinflowshighlightsastrategicallocationofinvestmenttowardtechnology-drivensolutions,particularlyinareassuchasprecisionagriculture,supplychaindigitalization,andsustainableagribusinessmodels.AsVietnam’sAgriTechlandscapeevolves,fundingisincreasinglybeingdirectedtowardhigh-growthstartupswiththepotentialtodriveefficiency,resilience,andsustainabilityacrossthesector.Capital invested (US$M)Source–DoVentures, NICNotable Agriculture StartupsNotable Agriculture Investors#of DealsAgriculture Funding in Vietnamese StartupsTe c h c o o pEnfarmGood TômFoodmapTe p B a cAiVietVe n t u r eTNB AuraBEENEXTEthos FundTo u c h s t o n e PartnersAntler

45$25$2320232024Notable Green Tech StartupsNotable Green Tech InvestorsGreen Tech investment on the rise•TheGreenTe c hsectorhasexperiencedanotableincreaseininvestorinterest,withdealactivitygainingmomentumin2024.Whilethetotalcapitalinvestedremainedrelativelystable,thenumberofdealssurgedfrom4to10.•Thistrendisdrivenbystrongregulatorytailwinds,increasingESGadoption,andrisingdemandforcleanenergyande-mobilitysolutions.TheVietnamesegovernmenthasintroducedpoliciesandincentivestoacceleratethecountry’stransitiontowardrenewableenergyandcarbonneutrality,aligningwithglobalclimatecommitments.Source–DoVentures, NIC#of DealsGreen Tech Funding in Vietnamese StartupsCapital invested (US$M)Nami EnergyDatBikeSelex MotorsStrideAlternoEboostBuyoClimateCapitalJungleTKGThe Invention LabNextransThe Radical Fund

462024 VC trends: Singapore led; Japan returned# of inve