Private capital poised to power a $1.1 trillion economy

Private capital poised to power a $1.1 trillion economy

Vietnam has entered a transformative era – one where its ambition, resilience, and digital drive are converging to create unprecedented opportunities for private capital.

The Vietnam Private Capital & Innovation Report 2025, jointly released by the Vietnam Private Capital Agency (VPCA), the National Innovation Center (NIC), and Boston Consulting Group (BCG), on April 22, paints a compelling picture: Vietnam is not just ready for capital – it is ready to lead.

Despite a cooling global economy and capital market tightening, Vietnam saw $2.3 billion deployed across 141 deals in 2024. Resilient deal activity, buoyed by fundamentals, signals continued investor confidence even as global venture and private equity flows softened.

The report reveals a perfect storm of opportunities as Vietnam posted 7.1 per cent real GDP growth in 2024, ahead of most Asian economies, and a $1.1 trillion economy by 2035, which is 2.5 times its current size. Vietnam has attracted $25 billion in foreign direct investment disbursed in 2024, up 9 per cent on-year. Vietnam's middle class is set to comprise 46 per cent of the population by 2030, while the digital economy contributes 18.3 per cent of GDP, en route to 35 per cent by 2030.

“Vietnam has graduated from promise to potential,” said Vy Le, chair of the VPCA and general partner at Do Ventures. "This is our defining decade. Amid global uncertainty, Vietnam stands out as the destination for durable growth, digitally native innovation, and forward-thinking policy. The capital is ready. The time is now."

Ecosystem rewired for scale

From capital market reform to international financial centres and blockchain regulation, Vietnam's financial infrastructure is maturing at speed. These reforms are creating clearer exit pathways, de-risking foreign capital, and positioning Vietnam for an investment-grade rating in the near term.

The country is also in the middle of a super cycle of infrastructure investment. With nearly $500 billion in ongoing foreign direct investment, including mega-projects from Samsung, Intel, Lego, and Foxconn, Vietnam is not just a manufacturing hub, it is a strategic node in the global supply chain.

Vu Quoc Huy, director of the NIC, added, "Vietnam's growth story today is deeply intertwined with our innovation agenda. We are not just investing in infrastructure, but in future-ready ecosystems, where digital talent, deep tech, and international capital converge. This is a pivotal moment to build Vietnam into Asia's most agile innovation economy."

The report outlines multiple value-creation pathways for investors, including partnering with local champions to scale across ASEAN and backing early-stage digital startups, especially in AI, automation, and agritech. Other pathways include modernizing fragmented traditional sectors with digital tools; investing in climate tech, renewables, and green logistics; and building digital public services and smart infrastructure for tier two cities.

“Investors who understand Vietnam's unique macroeconomic setup –and act with long-term conviction –can shape the next wave of Southeast Asian growth,” said Ben Sheridan, global head of principal investors at Boston Consulting Group. "We are entering a golden age for private capital in Vietnam. This report is a strategic compass for what's next."

While private capital inflows account for 35 per cent in value terms, investor participation remains robust. Nearly 150 venture capital investors were active in 2024, led by Singapore, Japan, and Vietnam. Early-stage deals under $0.5 million increased 73 per cent, signalling startup resilience. Buyouts comprise $1.7 billion of private equity activity, reflecting a preference for mature, cash-generating assets. Mid-market deals ($100 million-300 million) surged 2.7 times, underscoring appetite for scalable platforms.

Vietnam is also emerging as a hotbed for next-gen tech sectors. AI startup funding soared 8 times on-year to $80 million, while agritech investment jumped nine times, driven by food security and digital supply chains.

VIR