Foreign investment funds eye fintech startups

Vietnam economy, Vietnamnet bridge, English news about Vietnam, Vietnam news, fintech, smartphone, news about Vietnam, English news, Vietnamnet news, latest news on Vietnam, Vietnam,

M_Service, an online mobile service provider, has received $28 million worth of investment from Standard Chartered Private Equity (SCPE) and Goldman Sachs to continue developing MoMo, the e-wallet brand.

This is the first time Vietnamese startups have had such a two-digit capital disbursement, especially in fintech, a new business field.

SCPE, a new investor for MoMo, has agreed to inject $25 million into the brand. Meanwhile, this is the second investment deal with MoMo after it poured $5.75 million into the e-wallet in late 2013.

MoMo is one of the very few cases in which Goldman Sachs issued a disbursement for a company in its early development.

At least 83 percent of traditional financial firms said they feared that a part of their business would fall into the hands of fintech businesses. 

According to Terence Ting from Goldman Sachs Investment Partners, one of the important reasons for the investment fund to decide to inject capital into MoMo was the presence of renowned names from the banking, telecommunication, information technology and advertisement sectors on the e-wallet’s management board.

However, what attracts investors even more was the business model. Both investors have confidence in MoMo as a business model with great potential in the future.

According to Nguyen Ba Diep, vice president of MoMo, the number of MoMo users has reached 2.5 million, including 1 million customers using MoMo wallet and 1.5 million being serviced via MoMo’s agents. 

The rapid increase in the number of users shows the flexibility of technology firms in comparison with traditional finance companies.

MoMo is a typical example of the e-wallet trend which began years ago. It is a representative of first-generation technology firms which created a platform for financial services in Vietnam.

The race of mobile apps for the consumer finance sector is heating up in Vietnam. While banks now rush to apply mobile banking, technology firms have also geared up.

Three years after the debut in 2010, MoMo received foreign capital and adjusted the business model with the combination of online and offline transactions.

According to Diep, MoMo can be compared to the banks’ extended arm which helps bring financial services to 80 percent of Vietnamesee who still cannot access services.

The analyst commented that MoMo’s success in calling for foreign capital showed investors’ great interest in Vietnamese fintech startups.

In July 2015, a club for Vietnam’s fintech community was established under the sponsorship of two big financial institutions – Dragon Capital and Standard Chartered Bank.

PricewaterhouseCoopers has released a report showing the emerging of technology firms in the finance sector. At least 83 percent of traditional financial firms said they feared that a part of their business would fall into the hands of fintech businesses. 

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