Vietnam’s AI startup ecosystem is undergoing a period of robust and dynamic growth, capturing strong interest from both domestic and international investors. As AI continues to reshape various industries, AI startups in the country are positioning themselves at the forefront of innovation.

According to the “Vietnam’s AI Economy: Breakthrough Opportunities and Direction for Vietnam” report, released by the National Innovation Center (NIC), the Japan International Cooperation Agency (JICA), and the Boston Consulting Group (BCG), AI startups in Vietnam are increasingly asserting their presence in the regional market, not just in terms of quantity but also in quality.

Notably, Vietnam currently ranks second in ASEAN for the number of generative AI (GenAI) startups, accounting for 27 per cent of the region’s total. As of 2024, Vietnamese AI startups have collectively attracted $780 million in funding from local and global investors.

In 2024 alone, investment capital in AI startups in Vietnam reached $80 million, an eight-fold increase compared to 2023. Such results not only underscore the tremendous development potential of Vietnam’s AI startup ecosystem but also clearly reflect a broader shift in capital flows towards innovative, high-tech startups. It also signals growing investor confidence in Vietnam’s capacity to nurture cutting-edge technologies and drive digital transformation across industries.

Strategizing to win over investors

AI startups in Vietnam also have access to significant opportunities for rapid growth. With a young, tech-savvy population, increasing digital transformation across industries, and strong government support for innovation, the country is emerging as fertile ground for AI-driven solutions. In particular, sectors such as healthcare, finance, education, and manufacturing are actively exploring the application of AI to improve efficiency and competitiveness. This creates a favorable environment for AI startups to scale quickly, attract investment, and make meaningful contributions to both the domestic and regional markets.

According to Mr. Dang Huu Son, Co-Founder and CEO of LovinBot AI, Vietnam’s startup ecosystem is currently quite dynamic, driven by the strong development of the technology sector, particularly the rapid and breakthrough growth of AI. However, many small and medium-sized enterprises (SMEs) in the country still lack a clear understanding of how to apply technology, especially AI, to their business activities. “This presents a major opportunity for AI startups to develop practical solutions that can help SMEs access and effectively adopt technology,” he said.

However, in today’s increasingly competitive landscape, promising technology alone is no longer sufficient to appeal to investors. While innovative solutions and technical expertise are essential foundations, they must be supported by a clear and compelling business strategy. As the number of AI startups continues to grow, both investors in Vietnam and across the region are becoming more selective, placing greater emphasis on a startup’s ability to turn technology into tangible value.

Therefore, in order to truly capture investor interest, Vietnamese AI startups are shifting their focus towards building well-defined, long-term fundraising strategies. On this matter, Mr. Khoa Nguyen, Founder and CEO of Ba3, said that revenue generation is currently one of the most critical factors investors consider when evaluating AI startups in Vietnam. If a startup can generate revenue early, it will stand a better chance of catching the eye of investors.

To achieve this, Mr. Khoa said tech startups in general and AI startups in particular must have a clear understanding of the specific market segment and the core technologies they are pursuing. This involves conducting thorough market research, identifying their unique value proposition, and ensuring alignment between product development and actual customer needs.

In addition, they must actively benchmark key revenue metrics such as monthly recurring revenue (MRR) and annual recurring revenue (ARR) against competitors in the same space. This not only helps them gauge their performance but also provides strategic insights to refine their business model, improve financial planning, and strengthen their appeal to potential investors. “Along with that, to get investors’ attention, a startup must prove it can achieve revenue levels equal to or above the industry average in Vietnam or even across Southeast Asia,” Mr. Khoa added.

Building a strong founding team

Beyond revenue and business models, one of the most important factors investors evaluate is the strength, cohesion, and long-term vision of the founding team. While a solid product and promising financials can attract attention, what truly sustains investor confidence is a leadership team that possesses not only the technical expertise to build innovative solutions but also the strategic foresight and resilience to navigate the challenges of scaling a startup.

Specifically, Ms. Flora Bui, Founder and CEO of Acie, noted that Southeast Asian investors often focus on metrics like MRR or ARR, whereas US-based investors tend to look more closely at founder capability. Leading accelerators such as Y Combinator from the US, for example, place significant weight on a team’s academic background and industry experience and their ability to adapt and build cutting-edge AI technologies. “A startup that has a strong and cohesive founding team, especially one with alumni from prestigious universities or prior experience at global tech firms, is a major advantage in the eyes of international investors,” she noted.

Moreover, the alignment within the founding team from the early stages is also important. Before launching a company, founders need to reach clear agreements on individual roles, financial commitments, and responsibilities in building and running the business. “Without internal alignment, it’s very difficult to build investor trust, as investors always look for transparency, stability, and a unified vision from the founding team,” Ms. Flora Bui added.

While startups must do the heavy lifting, building a vibrant and sustainable AI tech ecosystem is also critical for attracting long-term capital. To achieve this, Vietnam needs to focus on several key pillars such as developing high-quality human resources for the AI and high-tech sectors, setting the right market directions, and implementing timely and targeted support policies for startups.

In particular, deep AI education and training is regarded as a cornerstone in developing the next generation of tech entrepreneurs capable of turning AI products into real-world solutions. Furthermore, startup-friendly policies, such as tax incentives, preferential loans, R&D support, and simplified legal procedures, can serve as vital springboards to help startups overcome early-stage challenges and scale faster.

With these necessary requirements, Ms. Flora Bui believes that Vietnam is already sending strong signals of commitment to innovation, especially through favorable government policies aimed at building a more supportive environment for tech startups as well as AI startups. In particular, she noted that, in the future, the funding landscape for AI startups is expected to become more vibrant as major corporations, especially in the banking and finance sector, begin to actively engage in digital transformation. This shift is being driven by the government’s growing encouragement of AI adoption in management and operational activities within the financial sector. Therefore, AI startups need to be thoroughly prepared in terms of technology, business models, and fundraising strategies in order to seize upcoming opportunities and attract investment as the wave of digital transformation continues to expand.