Vietnam’s fintech innovators are trailblazing the future of digital microtransactions.
After moving up 13 places in the rankings for the world’s best startup ecosystems, investors are beginning to turn their eyes toward Vietnam’s rich offering of tech startups.
In particular, fintech businesses have gained substantial traction over the past few years. With the second highest number of fintech incubators in the region (second to Singapore), it comes as no surprise that 63% of Vietnam’s 2016 venture capital funding was put toward its fintech industry. Vietnamese fintech continues to experience steady growth, as evidenced by a 35% increase in fintech VC funding between 2018 and 2019.
Here are 4 startups leading the charge for Vietnam’s fintech ecosystem.
VayMuon
After securing seed funding just under a year ago, VayMuon has expanded to take its place as Vietnam’s largest peer-to-peer (P2P) lending platform. P2P platforms allow individuals to obtain loans from other people without first requiring the financial services of a bank–cutting out the middleman.
From just the five co-founders in 2017, the startup now employs 200 people across its 4 branches in Vietnam, Myanmar, Thailand and Cambodia. This business model clearly has the capacity to flourish, as demonstrated by VayMuon’s steady monthly growth of 20%. Not to mention, the app has successfully connected 2 million borrowers with 400,000 unique lenders.
VayMuon is working to popularize paperless and high-speed loan-application processing in Vietnam. They have also started to work with Vietnam’s largest payment gateway Nganluong to penetrate more fintech niches, by spreading VayMuon’s reach into ecommerce, salary loan management and supply chain financing.
MoMo
Taking inspiration from China’s Alipay and WeChat Pay, Vietnam’s newest e-wallet platform MoMo is constantly attracting new users. The platform, licensed by the State Bank of Vietnam, allows individuals to make small transactions cash-free.
MoMo serves a young demographic. Over a quarter of the market of 100 million people are under 25. However, what makes MoMo special is not just its ability to cater to young users in metropolitan areas, but people in rural regions of Vietnam as well. Its widespread network of “transaction points” facilitates payments from both cities and the countryside, where the use of smartphones may not be as prevalent.
MoMo has seen its original business model as a pure online cashless payment system evolve since its founding in 2013. Displaying textbook startup agility, it has since broadened its reach to manage payments for software licensing, airline ticketing, and game cards. MoMo as a business rides the wave of mobilization and embodies textbook startup agility in an ever-evolving digital market.
With almost $134 million raised in three rounds of funding, MoMo’s growth is showing no signs of stopping. Its popularity among Vietnamese youth also continues to demonstrate fintech’s place in Southeast Asia’s tech future.
Finhay
Fintech startup Finhay had recently secured a funding round led by Acorns co-founder Jeffrey Cruttenden and Thien Viet Securities.
According to Finhay’s website, “Finhay is a one-stop-shop for financial services in Vietnam that helps millennials build wealth wisely.” Users are able to microinvest in Vietnam’s mutual funds. In fact, Finhay allows users to invest as little as VNĐ50,000 or US$2 in each transaction.
Finhay founder and CEO Nghiem Xuan Huy aims to use the financial backing to accelerate growth. The company is also looking into education initiatives which teach the youth of Vietnam the basics of investing through curated online content. The company believes that by venturing into financial literacy, it will gain a comparative advantage over its other fintech competitors. By doing so, the company recognizes the growing market for fintech services in Vietnam, especially among Vietnamese youth. Its commitment to financial education could further boost the demand for fintech platforms.
Utop
Founded in 2018, this app by Vietnam’s FPT Group consolidates small Vietnamese businesses into one network and opens the door for a standardized system of loyalty programs. Users are able to redeem desirable loyalty promotions from more retailers. The app is leading the charge for the growth of small Vietnamese businesses, and building a more convenient shopping experience for consumers.
The company also works with blockchain platform akaChain to deliver enhanced data security for shoppers and establishments alike. The acquisition of a $3 million investment from Japanese financial services company SBI Holdings is fuelling the company’s desire to expand into Japan’s massive loyalty dependent retail industry. Investors are expecting it to rival Tsutaya’s T-Point loyalty cards as a result of its branching out into Japan.
“Based on FPT’s enterprise blockchain platform akaChain, its technology capabilities, as well as strong network of customers, I am completely positive that this is the best time to launch Utop,” President and CEO of SBI Holdings Yoshitaka Kitao said at the time of the announcement.
Vietnam’s extensive network of fintech services is just one example of the country’s blooming startup ecosystem and its commitment to developing viable alternative financial services. These startups will hopefully bring even more capital into the region, blazing the trail for more fintech startups to come.
Header image courtesy of Peter Nguyen on Unsplash.
