M&A in Vietnam’s technology sector to boom in 2022

Vietnam's technology sector is expected to lure great investment capital as well as the sharing of management capacity and advanced technology from tech investment funds and international tech enterprises.

An overview of the workshop. Photo: Phi Nhat

The number and value of transactions in this sector is forecast  to continue to set new records, according to Le Xuan Dong, Managing Director, Head of Market Research & Consulting Services at FiinGroup JSC.

Looking to the future, Dong believed the technology sector in Vietnam will continue to grow stronger in the coming time thanks to the encouragement and support of the Vietnamese Government for the development of tech businesses as well as the widespread digital transformation in the economy.

The Southeast Asian country has witnessed a strong wave of investment through M&A activities in the technology sector during the past three years.

By the end of October 2021, the number of M&A transactions in the technology sector nearly doubled and the value of deals more than tripled the total in 2020.

The main technology fields that have attracted a large amount of investment capital in recent years included e-commerce, Fintech, Ed-tech, Logistics and business automation.

In the fintech field, data is defined as the new oil and data analytics is forecast to have strong growth potential in the near future.

“There is a growing demand for clean, reliable data sources for critical business decisions and financial transactions from businesses and financial institutions both at home and abroad,” said Dong.

The main growth drivers for the technology sector in Vietnam and M&A activities are the trend of digital transformation which is taking place strongly in areas such as financial services (banking, insurance, securities), retail, logistics, education, and healthcare.

Digital transformation helps businesses improve customer experience, increase customer base, and optimize business operations.

According to FiinGroup, digital transformation also increases demand for digital platforms, digital products and services. “This is a very good environment for the emergence and strong development of tech enterprises in these fields as well as increasing the need to raise capital through M&A to expand their business activities,” Dong said.

Delegates attend the seminar on January 11

Speaking at a seminar M&A trends in technology on January 11, Can Van Luc, Chief Economist of BIDV said the Covid-19 pandemic is an important catalyst to accelerate the digital transformation process in businesses.

Social distancing and remote working in the context of the pandemic have promoted the development of technology solutions, helping Vietnamese businesses to maintain continuous operations and get closer to customers as well as creating digital ecosystems to help businesses together participate and expand customer experiences, Luc said.

Vietnam has attractive demographics for the growth of the tech industry that helped to provide an abundant number of customers for digital products/services as well as ensure potential human resources for the development of tech businessesin the future.

From a business perspective, Ho Phi An, Founder and CEO of EI Industrial JSC, Vietnamese business-to- business (B2B) e-commerce platform, said the increase in M&A in the technology field is very encouraging as businesses will have access to abundant capital from large foreign investment funds.  

“Investment funds will choose Vietnam as a key market in 2022, especially focusing on B2B businesses,” An predicted.