Vietnam is one of the fastest-growing economies in Southeast Asia, with a vibrant and dynamic startup ecosystem. Among its cities, Da Nang stands out as a rising spot for innovation and entrepreneurship, attracting domestic and foreign investors looking for opportunities in this emerging market. In this article, we will explore the story of Da Nang as a startup hub, the factors that contribute to its success, and the potential opportunities for investors in this city.

Da Nang's journey to be a startup hub in Vietnam

Da Nang is the fourth-largest city in Vietnam, located in the country's central region. It is known for its beautiful beaches, rich cultural heritage, and modern infrastructure. It is also a significant tourist destination, attracting millions yearly visitors.

But Da Nang is more than just a place for leisure and relaxation. It is also a place for innovation and creativity. In recent years, Da Nang has emerged as a leading city in developing and supporting startups, especially in technology, education, tourism, and social impact.

According to the Da Nang  Department of Science and Technology, by 2025, Da Nang will become a national-level innovative startup hub. Despite facing many difficulties sparked by COVID-19, the department, startup supporting units, universities, and colleges citywide, have together effectively implemented a wide range of highly practical activities, thereby significantly contributing to the development of the Da Nang startup ecosystem.

Some of the milestones and achievements of Da Nang's startup journey include:

• In June 2021, the Da Nang Innovation Startup Support Centre was officially established based on re-organizing the Science and Technology Information Centre under the Department of Science and Technology. This is considered a focal point connecting the domestic and foreign startup ecosystem network with the city in tandem with deploying supportive activities for innovative startups.
• In June 2021, the Da Nang Startup Network Coordinating Council was consolidated with the operating regulations. Da Nang has six incubators, two creative spaces, nine co-working spaces, ten startup clubs, many startup centers built within universities and junior colleges citywide, and two startup investment funds.
• In June 2021, Da Nang Startups had high expectations for establishing the National Innovation Startup Support Centre. In his remarks at the 15th National Assembly's 5th session in June 2021, Minister of Science and Technology Huynh Thanh Dat said that the ministry has developed and completed the project of setting up the National Innovation Startup Support Centre at Da Nang City.
• In April 2021, Da Nang may be Vietnam's fourth largest city, but its progress and prospects—and let's not forget its beautiful beaches—are attracting startup and investor attention. The city hosted SURF - Da Nang Startup Wave 2021, an annual event showcasing the city's best startups and connecting them with mentors, investors, media, and other stakeholders.
• In March 2021, Duy Tan University's 'Renewable Energy Backpack' project won the second prize in the national Go Green in the City competition organized by Schneider Electric Vietnam. Other elite projects such as 'Garbage recycling machine' by Duy Tan University, 'Centuine Milk' by the University of Science and Technology, and 'Mobile Application for Vegetarians' by the University of Economics also entered the final round of the Hult Prize 2021 startup competition in Southeast Asia.

These are examples of how Da Nang fosters a culture of innovation and entrepreneurship among its locals, especially the youth. The city has also incubated nearly 140 innovative startup projects and established about 50 innovative startups, including some that have attracted hundreds and thousands of dollars worth of investment capital, including Datbike Vietnam (an electric motorcycle company), Hekate (a smart home solution provider), and EM&AI (an artificial intelligence platform for customer service).

Factors behind Da Nang's success

Da Nang's success as a startup hub is not accidental. It has resulted from a combination of factors that created a conducive environment for innovation and entrepreneurship. Some of these factors are:

Visionary leadership

The municipal government has shown strong commitment and support for developing an innovative startup ecosystem in Da Nang. It has issued various policies and guidelines to facilitate startup activities, such as Decision No. 308/QD-TTg dated March 28, 2021, on approving the foreign investment cooperation strategy for the period 2021-2030, which aims to attract more foreign investors to the city, especially in the fields of innovation, technology, and digital transformation. The government has also allocated resources and funds to support startups, such as providing financial assistance worth a total of more than VND 600 million to 3 startup businesses and one incubator in 2021.

Collaborative network

Da Nang has a strong and diverse network of stakeholders involved in the startup ecosystem, such as universities, colleges, research institutes, incubators, accelerators, co-working spaces, startup clubs, investment funds, media, and other supporting organizations. These stakeholders work together to provide training, mentoring, networking, funding, and exposure opportunities for startups. They also organize events and programs to promote and celebrate the startup culture in the city, such as SURF - Da Nang Startup Wave, SHi Accelerator Journey (SHi-VTS), SV STARTUP (a national startup contest for students), and Da Nang Startup Day.

Talented & international workforce

Da Nang has a large pool of young and educated individuals who are potential entrepreneurs and innovators. The city has more than 20 universities and colleges that offer various programs and courses related to science, technology, engineering, mathematics, business, and entrepreneurship. These institutions also encourage and support their students to participate in startup competitions and activities, both locally and internationally. Moreover, Da Nang attracts talent from other parts of Vietnam and abroad, thanks to its high quality of life, low cost of living, and favorable business climate.

Strategic location

Da Nang is strategically located in the central region of Vietnam, which gives it access to a large market of over 30 million people. It is also well-connected to other major cities in Vietnam and the region by air, land, and sea. In particular, the direct flight from Da Nang to Hanoi and from Da Nang to Ho Chi Minh both take about over an hour. Meanwhile, it takes a bit longer (over 2 hours) to fly directly from Da Nang to Singapore. 

The city has an international airport that serves more than 10 million passengers per year, a deep-sea port that handles more than 10 million tons of cargo per year, and a railway station that links it to the North-South railway line. Furthermore, Da Nang is part of the East-West Economic Corridor (EWEC), which connects Vietnam with Laos, Thailand, and Myanmar. This gives Da Nang an advantage in trade and investment with these countries.

Opportunities for investors in Da Nang

Da Nang offers many opportunities for investors who are interested in tapping into the potential of this emerging startup hub. Some of these opportunities are:

Investing in startups

Da Nang has a vibrant and diverse startup scene that covers various sectors and domains, such as technology, education, tourism, social impact, agriculture, healthcare, and more. These startups have innovative solutions that address real problems and needs in the market. For example, MultiGlass is a technology-based startup project to help handicapped people use computers through eye and head movements. These glasses can also assist long-distance truck drivers to reduce fatigue, thereby contributing to reducing traffic accidents. 

Startups in Da Nang also have high growth potential and scalability. One typical example is Delta X project, a robotic arm applied in industrial production lines. The startup project successfully called for nearly USD 500,000 in Shark Tank Vietnam. Investors can find promising startups to invest in through platforms such as Innovative Startup Portal, which helps to connect with Da Nang's startup ecosystem, or events such as SURF - Da Nang Startup Wave or Da Nang Startup Day, which showcase the best startups in the city.

Partnering with incubators and accelerators

Da Nang has several incubators and accelerators that provide comprehensive support for startups at different stages of development. These include Da Nang Innovation Startup Support Centre (under the Department of Science and Technology), Songhan Incubator (SHi), DNES (Da Nang Entrepreneurship Support), DNES Lab (a joint venture between DNES and FPT University), Fablab Da Nang (a maker space under Duy Tan University), Hatch! Ventures (a venture builder), VietAI Hub (an AI-focused incubator), and more. Investors can partner with these organizations to access their network of startups, mentors, experts, and resources; or to co-create programs and initiatives that foster innovation and entrepreneurship in the city.

Establishing R&D centers or offices

Da Nang has a conducive environment for research and development (R&D) activities, thanks to its talented workforce, modern infrastructure, supportive policies, and strategic location. Many multinational companies have already established their R&D centers or offices in Da Nang, namely IBM Vietnam Innovation Centre (under Duy Tan University), Samsung R&D Institute Vietnam (SRV) Da Nang Branch Office (under Da Nang University of Science and Technology), LG Electronics Vietnam Hai Phong Co., Ltd. Da Nang Branch Office (under Da Nang Software Park), Gameloft Studio Da Nang (under Indochina Riverside Tower), Axon Active Vietnam Da Nang Branch Office (under Da Nang Software Park), FPT Software Da Nang Branch Office (under FPT Complex Building), CMC Technology & Solution Co., Ltd. Da Nang Branch Office (under CMC Building), Viettel Group Da Nang Branch Office (under Viettel Complex Building), VNPT Technology Co., Ltd. Da Nang Branch Office (under VNPT Building), MISA Joint Stock Company Da Nang Branch.

Final Thoughts

Da Nang is a rising spot as a startup hub of Vietnam, with a vision, a network, a talent, and a location that makes it an ideal destination for innovation and entrepreneurship. The city has a vibrant and diverse startup scene that offers many opportunities for investors looking for high-potential and scalable solutions in various sectors and domains. Da Nang also has a supportive and collaborative ecosystem that provides comprehensive support for startups and investors alike.

If you are interested in exploring the opportunities in Da Nang and Vietnam, we can help you. As a leading local consultant, we are equipped with extensive experience and expertise in diverse majors and sectors of the Vietnamese and global markets. We can walk you through the complexity of legal procedures. Take your chance to be part of this transformative journey. Take action now and explore the possibilities of doing business and investing in Vietnam. Contact our team for valuable insights and guidance on navigating Vietnam's dynamic investment landscape.