Vietnam is emerging as a technology market of note in Asia. Weeks after U.S. VC firm 500 Startups announced a fund for the country, Vietnam-based fintech company Momo has landed a $28 million investment round from banking giants Standard Chartered (SCB) and Goldman Sachs.
Standard Chartered Private Equity (SCPE), the PE arm of SCB, put in $25 million to lead the round, while Goldman, which invested $5.7 million back in 2013, added a further $3 million.
Momo offers two services in Vietnam: a mobile wallet and payment app, launched in tandem with SCB last year, and a “branch-less” banking service for those without a traditional bank account. The company claims to have 2.5 million customers, one million of whom use the e-wallet.
Vietnam is picking up attention as tech market. Smartphone ownership is growing briskly among its population of 90 million while, with one-quarter of the population aged under 25, there’s real potential for disruptive technology to gain mainstream attention.
Momo is looking to take advantage of those conditions and use tech, and mobile in particular, as the vehicle for payments and banking in the country, where credit card adoption is low and banking services don’t often cover remote areas. The company draws inspiration from payment services like Alipay in China, which counts 500 million registered users, and celebrated mobile banking platforms like MPesa in Africa.
Pham Thanh Duc, CEO of M-Service — the company behind Momo — told TechCrunch in an interview that its e-wallet is designed to a universal payment platform.
“Our customers can use a lot of services” via the payment app, Duc said. “Such as paying bills like electricity, water or cable, buying movie tickets or shopping online.”
Duc said Momo currently works with more than 100 service providers on the payment app side of its business. The banking service, which started first, is designed to provide a bridge for consumers without a bank account and perhaps even a smartphone. It has a network of over 4,000 independent agents, through whom customers can load cash into their account, withdraw it when they want, make bill payments, and other activities that you’d do with a regular bank account.
With this new funding, Momo plans to grow its banking network to 11,000 agents by the end of 2017, and work on increasing the retail and merchant partners on its payment platform.
“We will also invest a lot in technology so that we can make our product more perfect,” Duc added.
Momo, which currently has over 300 staff, would be at break even if it ceased its current expansion strategies, Duc told us, but the company is firmly in startup mode and keen to explore the possibilities around mobile payment and banking in Vietnam.
Being in the finance tech space and backed by two banks, does that mean a possible exit to SCB or Goldman, which invested early on, is on the cards?
“Goldman Sachs can see the opportunity in this industry, [that] it will take off one day” in Vietnam. Duc said. “They are a longer-term investor.”
Many startups push themselves to go regional in Southeast Asia, particularly around fintech, but Duc explained that Momo is focused solely on the market opportunity in Vietnam for at least the next two years.
“In the long run, who knows,” he said. “If we can make it successfully in Vietnam, we can look to [places like] IndoChina and Myanmar.”