### Vietnam: The Rising Star of the Asian Tech Scene
In recent years, Vietnam has gained significant recognition as an emerging technology market in Asia. Following the announcement of a dedicated fund for the country by U.S. venture capital firm 500 Startups, the Vietnamese fintech company Momo secured a remarkable $28 million investment round led by banking giants Standard Chartered (SCB) and Goldman Sachs. This investment underscores the increasing interest in Vietnam’s digital economy.
### Major Investment Players
The funding round saw Standard Chartered Private Equity (SCPE), the private equity arm of SCB, lead with a substantial $25 million. Goldman Sachs, which had previously invested $5.7 million in Momo back in 2013, chipped in an additional $3 million this time. Such robust backing from notable financial institutions highlights the confidence these investors have in the growth potential of the Vietnamese fintech landscape.
### Momo’s Innovative Offerings
Momo is changing the game in Vietnam’s financial services sector. The company offers two key services: a mobile wallet and a payment app, which was launched in collaboration with SCB last year. It also provides a “branch-less” banking service aimed at reaching those who do not have access to traditional bank accounts. Currently, Momo boasts an impressive 2.5 million customers, with one million actively using the e-wallet, tapping into the country’s evolving financial habits.
### The Demographic Advantage
With a population of 90 million, Vietnam is experiencing a rapid increase in smartphone ownership. A significant portion of this population is under the age of 25, creating a fertile ground for disruptive technologies to flourish. As this younger demographic becomes increasingly tech-savvy, Momo is strategically positioned to leverage these trends, providing mobile-centric solutions in an environment where credit card use remains limited.
### Learning from Global Leaders
Momo draws inspiration from successful international payment platforms. Companies like Alipay in China, which boasts 500 million registered users, and the celebrated mobile banking service MPesa in Africa serve as models for what Momo aspires to achieve. Pham Thanh Duc, CEO of M-Service — Momo’s parent company — envisions the e-wallet as a universal payment platform designed to simplify financial transactions for users.
### Comprehensive Services for Customers
According to Duc, Momo’s e-wallet is crafted to cater to a wide array of customer needs. Through the app, users can pay for utilities, buy movie tickets, and shop online, among other services, all from the convenience of their mobile devices. This multifunctionality is key to Momo’s strategy, as it strives to become an indispensable tool for everyday transactions.
### Expanding the Network
Currently, Momo collaborates with over 100 service providers on its payment platform. The banking service, which served as the company’s launchpad, aims to bridge the gap for consumers who lack traditional banking services, potentially without even owning a smartphone. Momo has established a network of over 4,000 independent agents, who facilitate cash transactions, bill payments, and other banking activities, mimicking the essential functions of conventional banks.
### Plans for Growth
With the fresh influx of capital, Momo is set to enhance its operations by increasing its banking network to 11,000 agents by the end of 2017. The company is also committed to expanding its retail and merchant partnerships on the payment platform, capitalizing on the rising demand for digital payment solutions.
Duc emphasizes the importance of technological investment: “We will also invest a lot in technology so that we can make our product more perfect.” This commitment to continuous improvement reflects Momo’s ambition to solidify its position as a market leader in Vietnam.
### A Startup with Big Aspirations
Despite having a workforce of over 300 employees, Duc indicates that Momo would break even if it ceased its current growth strategies. However, the company remains firmly in startup mode, eagerly exploring new avenues within the mobile payment and banking sectors in Vietnam.
### The Potential for Strategic Partnerships
As Momo flourishes in the fintech space, questions arise regarding the potential for a strategic exit to SCB or Goldman Sachs. Duc notes that Goldman recognizes the untapped potential in Vietnam’s fintech market, positioning them as a long-term investor rather than an immediate exit candidate.
### Focused on Vietnam
While many startups look to expand regionally in Southeast Asia, Momo is concentrating its efforts solely on Vietnam for the next two years. Duc explains, “In the long run, who knows? If we can make it successfully in Vietnam, we can look to places like IndoChina and Myanmar.” This focus underscores Momo’s determination to establish a stronghold in its home market before considering broader regional expansion.