Is Hanoi really the startup capital of Vietnam?

From a collection by artist Nhat Le on the differences between Hanoi and Saigon.

If you’re living in Ho Chi Minh City, Vietnam’s largest city and business center, you’ll likely have some complaints about Hanoi, Vietnam’s capital city and center of power. Although Hanoi is filled with beautiful lakes and rich culture, the people are sometimes hard to get along with. It’s not as open or friendly as Ho Chi Minh City. It’s for this reason that you’ll likely meet more Hanoians coming to live in Ho Chi Minh City than the other way around. Ho Chi Minh City, seemingly, is just a more amiable place to do business.

But when you look more closely at the tech companies that grow out of Vietnam, you’d be surprised to see the impact of Hanoi. After all, most foreigners that come through Vietnam to check out the startup scene will go straight to Ho Chi Minh City. And yet, arguably, Hanoi, up there in the north, is Vietnam’s best kept secret.

See: Hanoi vs Saigon: Weighing Up Vietnam’s Two Biggest Startup Cities

First there’s FPT. It’s Vietnam’s biggest technology-related company. It has products across a number of categories: hardware manufacturing, electronics retailing (they’re the only official Apple retailer in Vietnam), cloud services, telco services, universities and even one of Vietnam’s top news sites. FPT invested millions into Vietnam’s undersea internet cable infrastructure and has been one of the biggest keys to Vietnam’s technological growth. FPT employs over 10,000 people across all of its categories and was founded all the way back in 1988. It’s an ancient giant headquartered in Hanoi. And it produces many new startup founders.

Next to FPT, you’ve got to consider the massive telcos. Viettel, which is run by the Vietnamese army, and VNPT, which is under the auspices of the prime minister are both highly influential. They’re a big part of why Vietnam’s internet penetration is so high and why the decentralized and affordable mobile services are available to millions of people.

After FPT and the telcos, there’s three huge tech companies: VNG, VC Corp, and Vat Gia. VNG is the biggest consumer technology companies with a popular messaging app called Zalo, $100 million in revenue, and over 2,000 staff. But if you look closely at the top leadership, you’ll see that most of them are northerners. VC Corp and Vat Gia, although possibly one-fifth to one-tenth the size of VNG, are still huge. And they’re both based in Hanoi.

See: A comprehensive look at Vietnam’s startup ecosystem in 2014

Don’t underestimate the influence of FPT, the telcos, and the big three. They give birth to most of the founders in Vietnam’s startup ecosystem as well as manage most of the top most trafficked websites in the country. They wield massive revenue budgets and some of the most talented tech people in Vietnam. After them, comes a handful of notable startups that are worth taking a look at, including Topica, Appota, mWork, .GEARS (the Flappy Bird creator), Yton.vn, Momo, JoomlArt, Money Lover, and more. These form the vanguard of growth-stage startups from Hanoi. On top of this, note that Topica Founder’s Institute, Vietnam’s top incubator, is based in Hanoi along with the Vietnam Silicon Valley project, an incubation project run under the auspices of the Ministry of Science and Technology.

And do I really need to even mention Vingroup, which is like a tech talent vacuum cleaner, sucking up people from across the startup and ecommerce ecosystem up to Hanoi.

What Ho Chi Minh City offers is business, openness, and market

Folks living in Ho Chi Minh City will be skeptical of my article. They will say that most of the money and innovation actually is produced in Ho Chi Minh City, but I think that the real advantages that Ho Chi Minh City has is a strong business mentality, an open culture, and a bigger and more receptive market. It’s no wonder that the new rising stars of ecommerce are in Ho Chi Minh City. That includes Tiki.vn, Hotdeal.vn, CungMua.vn, Project Lana, and Rocket Internet’s Lazada and Zalora. And there are more. By extension, since online booking is essentially an ecommerce thing, this is why the booking startups are also mostly in Ho Chi Minh City.

I’d also argue that although Hanoi is still the capital of Vietnam’s startup ecosystem, Ho Chi Minh City is producing a more promising set of young startups like Giao Hang Nhanh, Triip.me, Babyme.vn, Ticketbox.vn, and more. The tide is slowly shifting to Ho Chi Minh City, but it’s really too early to say how significant it’ll be. The money, relationships, and technical center of gravity is still in Hanoi and it will continue to be so for some time. After all, in the past few months, the two most notable acquisitions were from two Hanoian companies, when 24H bought HaiVL (also a Hanoian company) and FPT bought VNG’s 123Mua.

So, if you’re planning a visit to Vietnam’s startup ecosystem, it might be a good idea to take a hop over to Hanoi too.