2023 continued to be a year of ups and downs of the world’s economy. Analyst said it was the most lackluster period since the 2007-2008 financial crisis. 

This is not a surprise if noting that experts warned in early 2023 that the year won’t be a good time for startups when investment funds tighten investments and set higher requirements on startups.

Reports from StartupBlink, Crunchbase and CBInsights showed that by August 2023, total venture investment capital for global startups was $187.6 billion, a decrease of 46.4 percent compared with the same period in 2022. On average, $23.4 billion was injected in startups each month, a considerable decrease from the $37 billion in 2022.

2023 also witnessed the decline of leading startup ecosystems. The number of newly appeared unicorns was also at the lowest level in the last four years.

With statistics from Do Ventures, the Vietnam Open Innovation Ecosystem Report 2023 conducted by BambuUP showed investments made in technological firms last year.

Venture investments in Vietnam continued slowing down in 2023 for the second consecutive year.

The total value of venture investment affairs in Vietnam in the first nine months 2023 dropped by 13 percent to $427 million. Only 56 transactions were reported, down 40 percent in number of affairs, the lowest level since 2018.

The investments in startups decreased considerably in small- and medium-scale capital calls. The number of investment cases with less than $500,000 worth of capital dropped by 50 percent. The number of large investments ($10-50 million) also decreased, but insignificantly and it was higher than before 2022.

“In the current challenging conditions, raising funds is becoming more difficult as investors keep cautious with their disbursement decisions,” said Do Hoang Uyen Vy, co-founder the managing director of Do Ventures. 

When considering a startup, investors tend to pay higher attention to the issue of unit economics instead of rapid growth rate. Startups should adapt to the new trend and shift to a sustainable growth model to overcome the current difficult period, according to Vy.

Nguyen Huong Quynh, CEO of BambuUP, commented that 2023 was a winter of startups, as the number of technology unicorns dropped sharply and capital injected into startups also decreased. By contrast, the unicorns and startups related to AI witnessed a strong rise.

According to BambuUP, the number of newly set up businesses in Vietnam grew by 2 percent, while the number leaving the market increased more sharply, by 20 percent. The figures showed that 2023 was a tough year for Vietnam’s businesses, and Vietnam’s startup ecosystem needs a push to regain growth now.

However, there were still bright parts in Vietnam’s economy. The Global Innovation Index 2023 (GII 2023) report published by the World Intellectual Property Organization (WIPO) showed that Vietnam ranked 46th among the 132 economies, up two positions from last year.

Vietnam is in the second position in innovations among countries with lower average income, after India. In ASEAN, Vietnam is below Singapore, which is in the fifth position, Malaysia (36th) and Thailand (43rd).

According to WIPO, Vietnam was one of seven average income countries that made the greatest strides in innovations in the last decade.

However, the organization pointed out that the capital budgeted for science and technology and innovations in Vietnam did not see improvement in 2023. The ratio of investments in R&D to GDP was still low and it is on the decrease.

The Vietnam Open Innovation Ecosystem Report 2023 showed that the ratio was 0.4 percent, lower than the average level in Southeast Asia.

Vietnam ranked 66th in the globe in the index, a fall of seven grades from the year before and lower than 2021. Meanwhile, other regional countries all increased their investments in innovations, such as Thailand (1.3 percent), Singapore (2.2 percent) and Malaysia (1 percent).

The index also showed a country's proportion of investment in R&D to its startup ecosystem.

BambuUP commented that Vietnam’s startups have not seen considerable changes. However, Vietnam’s businesses seem to pay more attention to open innovation, which means that they cooperate with partners to boost marketing and sales.

Trong Dat