Top 5 Startup Funding Deals In Vietnam This Year

Vietnam has been the “apple of the eye” of investors in recent years. Next to Singapore and Indonesia, Vietnam is well-positioned to lead Asia’s startup ecosystem — even projected to surpass $1 billion this year, or at least close to that.

Vietnam’s startup ecosystem remains buoyant, despite the devastating lockdown and a new rise in COVID-19 cases crippling a supposedly recovering economy. New huge venture fundings continuously make headlines, and new market-disrupting enterprises are sprouting non-stop. Based on the latest data from venture capital firm DO Ventures, the first nine months of 2021 already exceeded 2020’s $600 million mark.

In a recent episode of Vietnam Innovators, Binh Tran, general partner at Ascend Vietnam Ventures, said the country’s remarkable economic rebound after a storied past had become a story worth telling, more so worth celebrating.

“Vietnam is a perfect testbed for emerging Asia. There’s a rising middle class who’s willing to spend on healthcare, education, retail, etc.,” said Binh. And there’s a large pool of small businesses doing something on the Internet — capturing customers, serving them more automatically, scaling revenue, and expanding their business.”

As one of the first seed-stage tech-focused VC firms in Vietnam, Ascend has witnessed firsthand how the startup and business ecosystem, in general, has evolved. Looking at how much has changed since the Vietnamese government tagged 2016 as the “year of the startups” and launched the “Initiative for Startup Ecosystem in Vietnam until 2025” program, the homegrown startups’ growth potential has become boundless.

There are big risks, however. As Vietnam establishes itself as a startup hub and slowly becomes an investor’s dreamland, the challenges have grown bigger and more serious as well. Even Ascend has dodged some bullets over the years because of fraud, or when visions of investors and startup founders no longer matched.

And because Vietnam’s now a rising star in the startup segment, the competition has also gone more critical — though not always in a bad way. “From Day 1 that a startup is established, it has to compete against hundreds of others, not just in Vietnam but in the region,” said Binh. “This has made Vietnam accessible for both entrepreneurs and investors because everyone can see the growth. Here, they haven’t developed a mindset and policies that are protectionist. In fact, Vietnam, next to Singapore, has the most open regulations to allow foreigners to own hundred percent of a company. This kind of accessibility increases knowledge sharing, as well as growth.”

Taking the challenges and rising competition as indications of growth, local and global venture capital firms and angel investors continue to back Vietnam’s startups — both the established and the newbies — pouring as much as $250 million into one company alone.

VNLife: $250 million

VNLife Corp, the parent company of VNPay, has achieved a new milestone in July this year after it netted over $250 million in one of Vietnam’s largest-ever funding rounds, raising the company valuation to above $1 billion. VNLife has secured its standing as Vietnam’s second tech unicorn, after gaming and entertainment firm VNG. The funding round was led by Dragoneer Investment Group and General Atlantic, with PayPal Ventures and EDBI also participating.

VNPay, its core financial tech unit, powers mobile apps of Vietnam’s 22 banks, including Agribank, Vietcombank and BIDV to allow over 15 million monthly active consumers to transfer money, pay bills, top up mobile credits, book tickets and shop seamlessly through the VNPay app. In addition, it also runs VNPay-QR, an interoperable cashless payment network that serves 22 million users and over 150,000 merchants across the country.

The new funding is expected to accelerate the growth of VNLife’s existing businesses and support its development of new platforms and technologies to serve its merchant partners and Vietnamese consumers better.

Aside from VNPay, the c company also runs domestic online travel agency VNTravel, and a new retail division Teko.

VNLife was said to have secured $300 million in funding in 2019 from SoftBank Vision Fund and Singapore’s state fund GIC, which carved its path towards becoming a unicorn. The company, however, did not officially disclose the funding round at that time.

Momo: $200 million

Perhaps the best way to end this year, Vietnamese fintech app MoMo announced just last week that it had crossed $2 billion in valuation after raising $200 million in Series E funding round led by Mizuho Bank. The new funding has pushed MoMo’s status in the startup ecosystem, making it Vietnam’s fourth unicorn, alongside VNG, VNPay and Sky Mavis.

What started as a SIM-card application that allowed people to transfer money and buy mobile top-up and game scratch cards in 2010, MoMo became a smartphone e-wallet that expanded into a super app that processes insurance payments and donations and provided an investment marketplace in 2014.

According to its co-founder Nguyen Manh Tuong, MoMo’s goal is "to improve the life of the Vietnamese people and merchants through technology, by giving them access to superior, simpler and affordable financial solutions.”

Furthermore, the e-wallet company intends to allocate their new funding to support rural expansion, accelerate their tech investments, and support small and medium enterprises in adapting to digital transformation to achieve an all-in-one smartphone application or "super app" that offers multiple services.

Sky Mavis: $152 million

In October, Sky Mavis raised $152 million in a Series B funding round, raising its valuation to nearly $3 billion to become Vietnam’s third unicorn. The Vietnamese game maker behind the popular blockchain-based game Axie Infinity is backed by prominent Silicon Valley venture capital firm Andreessen Horowitz and other VC firms, including Ascend.

“Axie Infinity is a classic story where the founder didn’t study overseas or work for Facebook or Amazon. He had to go and fight for his life in this environment and learned through the years, until it got to a point where he was competing toe to toe with the best of the best globally,” said Binh during the Vietnam Innovators interview.

The new funding will allow the gaming startup to fuel the play-to-revolution, bring in incredible talent across the globe, scale infrastructure for expected growth and build its own distribution platforms to support game developers to create NFT-enabled games.

Launched in February 2018, Axie has evolved from being unknown in the NFT world to becoming the largest NFT project of all time. It’s the first game designed to be owned by the community the plays it. For far too long, game publishers and app stores have held too much power and extracted too much value. The startup is working to change and reconstruct the gaming industry and share value with its most important members of the gaming community, the players. Axie Infinity now has over two million daily active users, from merely 38,000 in April this year.

Kiot Viet: $45 million

KiotViet, Vietnam’s leading merchant platform for micro, small and medium enterprises, in September bagged a total of $45 million in Series B funding led by global investment firm KKR. KiotViet’s existing investor, Singapore-based Jungle Ventures, also participated in the funding round.

Founded in 2014, the startup commits to enabling Vietnamese MSMEs to grow through technology, helping them run their businesses more easily and efficiently, KiotViet intends to leverage its platform further to become the most popular technology solution provider for enterprises in Southeast Asia through its new multi-million dollar funding.

KiotViet’s aims to further push for the digital transformation of MSMEs, a key segment that accounts for approximately 40% of Vietnam’s economy. The company delivers an affordable, full-suite software solution that includes point-of-sale, inventory management, CRM, and employee management services. It recently expanded to offer a B2B procurement marketplace and integrated logistics services for its merchants. It has plans to leverage its platform to provide financial services solutions such as payments and lending to customers.

Homebase: $30 million

Homebase, a real estate technology company, successfully raised $30 million in equity and debt to make homeownership accessible across Southeast Asia. The new funding solidifies Homebase’s position as a market leader in the Southeast Asia Proptech industry. Leading global investors participating in the round include Y Combinator, Partech Partners, Goodwater Capital, Ace and Company, Emles Advisors and Foundamental.

The new investors join previous strategic investors, including VinaCapital Ventures (VC arm of Vietnam’s largest fund management company), Brian Ma (Co-founder and ex-CEO of Divvy Homes); Troy Steckenrider III (ex-COO of Zerodown); and Darius Cheung (Founder & CEO of 99.co).

Homebase makes homeownership accessible to underserved market segments who may be turned away by strict traditional mortgage underwriting criteria by buying the home upfront for clients so they can move in today. Clients deposit each month towards their home savings, and have the option to fully buy out the home anytime, or walk away.

Homebase is set to develop its proprietary technology further, launch additional partnerships with real estate developers and agents, and increase its talent base in the coming months. The management team has 50+ years of shared relevant experience and comes from institutions like McKinsey, Goldman Sachs, Grab, Harvard, Stanford, and MIT.

The story was produced in partnership with Initiative for Startup Ecosystem in Vietnam.

This story program "Initiative for Startup Ecosystem in Vietnam until 2025" (also known as National Program 844) was approved by the Prime Minister on May 18, 2016 and assigned to the Ministry of Science and Technology of Vietnam in charge of implementation. The program aims to create a favorable environment to promote and support the formation and development of fast-growing businesses based on the exploitation of intellectual property, technology, and new business models.