Vietnam’s tech startup scene is getting hotter by the year. As investors bet heavily on the country’s rapid growth and enormous market potential, money is flowing in and valuations are skyrocketing.

A study conducted in July by KPMG International Ltd. and HSBC Holdings Plc. found that between the beginning of the pandemic and mid-2022, the number of start-ups in Vietnam almost doubled. Some of the biggest investors in the world, such as Sequoia Capital, Warburg Pincus LLC, and Alibaba Group Holding Ltd., back those who are putting up workable alternatives.

Vietnam drew a record US$2.6 billion through 233 private acquisitions in 2021, up from the US$700 million via 140 agreements the year prior, according to information from Google, Temasek Holdings Pte, and Bain & Co. According to Do Ventures, local companies will compete with those in Southeast Asia and will account for 13% of the region's overall venture investment flows in 2021, just behind Singapore and Indonesia.

The government demands more. They aim Ho Chi Minh City to become a center for tech funding by 2030 and to establish a digital economy that contributes 40% of the city's GDP.

Last month, the government issued an order to city officials directing them to put foreign investment in high-tech projects first while also offering other incentives to persuade multinational firms and influential people to establish creative research institutes.

Foxconn Technology Group, Apple's largest subcontractor, continues to advocate for the relocation of more production from mainland China to Vietnam.

In August of last year, Foxconn and a Vietnamese developer agreed to spend $300 million building a new factory in Bac Giang, where it already makes iPads and AirPods.