Fintech the focal point for Vietnamese start-ups to attract foreign capital

15-Aug-2017 Intellasia | Bao Dau Tu | 6:00 AM Print This Post

KPMG’s quarterly report showed that in the first quarter (Q1) of 2017, the total global investment in fintech field reached 3.2 billion USD with 260 deals. Of these, the Asia-Pacific region recorded 33 deals with total value of 492 million USD.

Vietnam is not out of the trend. According to estimates by Topica Founder Institute, in 2016, the total investment in fintech start-ups in Vietnam reached 129 million USD, accounting for 63 percent of the total value of start-up contracts. Companies with very young age such as Payoo, VNPT E-pay, M-Service (Momo), and F88 were leaders in the value of completed deals.

So how are the funding rounds of fintech start-ups?

Christian Konig, an expert in start-up field, founder of Fintech Meetup Vietnam and, after attending as a speaker at an event converging leading experts and investors in the start-up ecosystem of Vietnam, showed a very optimistic view on the growth of this market.

He forecasted that big investors like Alipay, Apple pay or Samsung pay will enter the market through different channels. The products of this market will also be much diversified from insurtech to insurance to weathtech investment advisory, etc. Thus, start-ups operating in this field will step by step become more professional and can diversify their services and divide products to best serve customers by cooperating with financial organisations like banks and insurance companies.

As of early 2017, up to 70 percent of the contracts focused on Seed-fund and Series A with about 29.1 million USD. F88, a pawn shop chain based in Hanoi which offers loans for various assets such as automobiles, motorbikes, mobile phones, laptops, and jewellery, has mobilised 10 million USD from Mekong Capital.

When it comes to Series B, MoMoan e-wallet services raised 28 million USD from Goldman Sachs and Standard Chartered Private Equity (SCPE). Series B, Series C, and Angel and acquisition rounds took up to respectively 8 percent, 4 percent, 4 percent and 14 percent.

This is predictable as fintech has always been identified as a potential market for growth in which venture investment fund are increasing their investment in markets with young population where traditional banking and financial services are still primarily used.

Recently, two Korean funds including Korea Investment Partners (KIP) and Mirae Asset Venture Investment have invested 10 million USD in Appota a Vietnamese application. This first deal will be used to stimulate the next development phase of Appota with the main focus on fintech.

In November 2016, Champion Crest the investment fund of Credit China Fintech Holding from Hong Kong acquired 51 percent of Amigo Technologies Joint Stock Corporation at a price of 12.73 percent million USD.

According to information, Amigo Technologies (the developer of IT services and solutions for personal financial services in Vietnam) is one of the five largest IT service providers in Vietnam in terms of market share.

Phang Yew Kiat, vice President cum Managing director of Credit China Fintech said that this deal is part of the group’s overseas expansion plan. The acquisition of Amigo Technologies marked a significant milestone and is the first step in expanding the group beyond China, said Phang.

The 28 million USD deal between M-Service, the owner and operator of MoMo, and Goldman Sachs and SCPE was also completed in 2016.

Thus, it can be seen that start-ups with financial products are always receiving special attention from investors.


Category: Finance

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