Nano Technologies, a Vietnamese pioneer that lets workers access their wages through its Vui App platform, successfully secured $6.4 million last week in an oversubscribed pre-Series A round led by Singapore-headquartered venture capital firm (VC) OpenSpace.

New investors in the round included Partech Partners, Tekton Ventures, IT Farma, and Sketchnote Partners, in addition to Golden Gate Ventures (GGV), FEBE Ventures, ACE & Company, and more.

The fresh funding round comes a year after Nano Technologies raised $3 million in its seed funding round, led by returning investors GGV and Venturra Discovery, noted Dealstreetasia.

Previous to its involvement in Nano Technologies, OpenSpace has also invested in other Vietnam’s startups, such as edtech Topica and Finhay.

Finhay, a domestic digital investment platform, bagged a $25 million Series B round co-led by OpenSpace Ventures and VIG, along with Insignia, TVS, Headline, TNBAura, and IVC in late June.

Likewise, business software-as-a-service startup True Platform closed $3.5 million in seed funding from January Capital, Alpha JWC Ventures, BEENEXT, FPT Corporation, and other angel investors in May. The funding round was led by January Capital, a VC firm in Singapore with a portfolio of 40 startups from pre-seed round to Series C in the Asia-Pacific region.

In May, Singapore-based GGV and Vietnam’s National Innovation Centre inked a cooperation agreement to strengthen the long-term relationship between the two sides and provide support for the development of the start-up community and innovation ecosystem in Vietnam.

Accordingly, GGV will increase investment in the nation, promote exchange, encourage new ideas and innovations, and act as a catalyst to promote the position of Vietnamese startups in the region.

According to the latest KPMG-HSBC joint study on Asia-Pacific’s technology-focused startup landscape, Vietnam has one of Asia’s newest and most dynamic startup scenes. Home to just 1,600 startups at the start of the pandemic, that total has now jumped to more than 3,000 (including the country’s four unicorns), cited data platform Tracxn.

Driving the country’s digital economy is a large, young population that is willing to adopt new tech and consumer services, supportive government policies, and a surge in overseas funding.

According to the Fintech Singapore Association, Vietnam’s most active fintech investors include Y Combinator, Jungle Ventures, 1982 Ventures, and Goodwater Capital, among others.

In Vietnam, Jungle Ventures, a Singapore-based VC, is backing fintech startups including Medici, a startup striving to make healthcare and insurance more accessible and affordable to the masses; Timo, Vietnam’s first digital banking platform; and KiotViet, a cloud-based point-of-sale and store management software suite with inventory and cash flow management, marketing, and other management solutions.

While based in the United States, Goodwater Capital has also been looking at investment potential in Southeast Asia. In Vietnam, its investments include MoMo operator M_Service, Vietnam’s biggest e-wallet Anfin, and Nano Technologies.

1982 Ventures, meanwhile, has allocated a significant portion of its fund to Vietnam and committed to investing more capital in Vietnamese startups this year.

“We find that many Singaporean, regional, and global investors are aware of Vietnam’s potential but unfamiliar with the market and startup ecosystem. As an early investor in Infina, Fundiin, and Homebase, 1982 Ventures has demonstrated that it understands and has access to high-quality Vietnamese fintech startups at the earliest stages,” the VC firm said.

Although Vietnam’s per capita GDP remains relatively low compared to others in the region, its economy is expanding faster than any other market. Growth is predicted to hit near pre-pandemic expansion levels of 5.5 per cent in 2022 and 6.5 per cent in 2023, according to World Bank estimates.

In general, KPMG estimated that venture capital deals in Vietnam surged to $1.1 billion in 2021, up from $301 million in 2020, and $330 million in 2019.

“Vietnam has emerged as a hub for startups, closely competing with the likes of Indonesia and Singapore. With a young, energetic, and educated population, high smartphone and internet penetration, and strong government support, Vietnam should maintain its position as a compelling destination for tech entrepreneurs and investors, making the country a thriving environment for potential unicorns,” said Tim Evans, CEO of HSBC Vietnam.

“In terms of government support, perhaps we can start looking at how the government can create industry-specific policies and supportive frameworks for startups that focus on creating products and services that solve industry-specific challenges,” director of KPMG Private Enterprise Nguyen Trung Kien told VIR.

Source: VIR