Drone photo of Ho Chi Minh City, Vietnam.
Ho Chi Minh City, 30 September 2024 – Vietnam’s rapidly growing climate tech startup ecosystem secured US$92.6 million in cumulative financing for 49 startups between 2015-2023, according to the first report to map the growth of the country’s funding ecosystem.
The Vietnam Climate Tech Ecosystem report released today by New Energy Nexus and Clickable Impact with support from the Swiss Entrepreneurship Program (Swiss EP, shows that there is huge room for growth as climate tech funding contributed only four percent of Vietnam’s total venture capital investment in 2023—well below the global average of 10 percent.
“Vietnam witnessed a remarkable acceleration in investment from 2021-2023, with funding for climate tech startups averaging 365 percent growth year-over-year,” said Thao Tran, country head of New Energy Nexus Vietnam, one of the few organizations building a clean energy innovation ecosystem to support climate startups. “This shows that there’s a strong ecosystem to support clean energy innovators to develop their ideas, but that there’s a funding crunch when it comes to commercialisation and deploying this tech where it’s needed most,”
“We see great room for entrepreneurial support organizations like New Energy Nexus to help Vietnam’s climate tech entrepreneurs build more commercially sound businesses, improve their investment readiness, and connect with both domestic and international capital,” said Jason Lusk, managing partner of Clickable Impact.
Key findings from the report:
- Among the 49 funded startups, 76 percent have been founded since 2019.
- Most deals have been early-stage, with seed and Series A funding comprising 47 percent of the deal count. Only two startups have graduated to Series B, a funding round that signals a startup’s readiness to scale.
- Most climate tech startups operated out of Vietnam’s largest cities: Ho Chi Minh City (65.3%) and Hanoi (26.5%).
- Farming and food production startups raised 48.4 percent of all climate tech funding in Vietnam.
Although funding for the circular economy and carbon sectors remains limited, there is an emerging trend marked by an increasing number of startups in these areas. This aligns with the growth in grant funding, which could lead to a higher number of investable startups in the next business cycle.
Furthermore, while many startups and investors remain optimistic about fundraising, a gap persists between investable startups and investors with a deep understanding of the market and the specific challenges faced by early-stage ventures.
Vietnam is highly vulnerable to climate change; according to the World Bank, the country faces potential economic losses of up to 12-14.5 percent of its annual GDP by 2050.1 Climate tech entrepreneurship is critical in mitigating Vietnam’s greenhouse gas emissions and empowering the country’s communities and industries to build climate resilience.
Notes:
[1] World Bank (2022). Vietnam Country Climate and Development Report.