The economic development of Vietnam is closely following China’s playbook, where three decades of manufacturing and infrastructure-driven economic growth led to significant increases in consumption and labour productivity, and steadily increasing incomes.

Silverhorn has been active in Vietnam since 2015 and has witnessed the country transform into a “China + 1” manufacturing hub for global tech giants such as Samsung, Intel, LG, and Apple. Coupled with an expanding middle class and an education system with globally-recognised strengths in math, engineering, and science, Vietnam has become fertile territory for domestic entrepreneurs and the investors who back them.

Recently, we delved into the ASEAN secular growth story and the fast-developing Venture Capital (VC) ecosystem. We described how ASEAN’s VC ecosystems are entering a virtuous cycle where success is breeding success: significant exits produce wealthy entrepreneurs who recycle their financial and human capital into the VC space, thereby increasing the pool of capital, talent, entrepreneurs, and ideas.

In this Perspective, we analyse one of ASEAN’s new tiger economies: Vietnam (the others being Indonesia and the Philippines) using our Venture Capital Ecosystem Assessment framework based on six systematic factors to demonstrate why VC investing in Vietnam is poised to offer highly compelling risk-adjusted returns.