Money Forward plans regional expansion
Earmarked by the Japanese company as the first foreign country to embed in and a base for future expansion in Southeast Asia, Vietnam is fast developing its fintech market
11 Jan 2019 | Nguyen Tuong Thuy

Money Forward, Inc., a major provider of cloud-based asset and accounting management services from Tokyo, is rushing to add new apps to Vietnam's infant but crowded fintech market, home to a growing number of tech-savvy consumers.

Ho Chi Minh City-based Money Forward Vietnam Co., Ltd., launched by its Japanese CEO Takayuki Tsuzuki on January 8, 2019, envisages a workforce with around 200 software engineers in the next two years.

Vietnam is home to some 95 million people and a supply of young software engineers, said the CEO, adding that as the country and his nation shared various similarities in culture, engineers from both sides were able to work together very effectively.

Tsuzuki, who also serves as a director at the Tokyo head office, said he enjoyed working with Vietnamese engineers to bring reliable services to customers. He is responsible for developing fin-tech products already popular in Japan and branching out new services for the Vietnamese market, which Money Forward views as its gateway to Southeast Asia.

In total, Vietnam currently houses about 70 fintech companies that are competing in the US$4.4 billion market, according to Asia-focused consulting firm Solidiance.

Money Forward was set up in May, 2012. The Vietnam arm was formed last August as a wholly owned subsidiary – now a consolidated subsidiary. Last May, the Tokyo-listed corporation announced plans to set up a crypto-currency trading platform and related-media channels.

With slightly more than 70 fintech companies raising just US$3 million in 2017, Vietnam's fintech ecosystem remains relatively small and is still in its early stage compared to other ASEAN markets such as Singapore or Indonesia. The sector is, however, growing fast in Vietnam, fuelled by financial institutions, startups, tech-savvy customers, buttressed by a government working toward developing a favourable environment for digital financial and fintech innovations.

Another factor is that the Vietnamese have also become smartphone savvy. Smartphone sales in Vietnam totalled 15 million units in 2017, almost double the 2014 volume. A longtime manufacturing base for top global smartphone maker Samsung Electronics, Vietnam has emerged into a market in its own right. Consumers change their smartphones more often than before and require more new apps. Smartphone ownership is growing briskly amongst a consumer base where one-quarter of the population are aged under 25.

Quite a few fintech companies are pushing to put Vietnam on the global fintech map, with other players to watch include names like MoMo, Moca, Finhay, Tima, OnOnPay, TrueMoney Vietnam, and TomoChain.

MoMo is an e-wallet and mobile payment app developed by Vietnamese company M_Service. It offers customers a different way to make payments both online (mobile e-wallet) and offline (MoMo agents). MoMo is one of Vietnam's most successful fintech platforms and is backed by Standard Chartered and Goldman Sachs.

The firm in 2016 landed a US$28 million investment from the two banking giants, with US$25 million from Standard Chartered Private Equity (SCPE), the PE arm of Standard Chartered, and US$3 million from Goldman, which invested US$5.7 million into MoMo back in 2013. MoMo was named one of the 2018 Fintech 100 Leading Global Fintech Innovators by H2 Ventures and KPMG.

Meanwhile, Moca was granted a license for payment services by the State Bank of Vietnam in 2016 and has a network of 11 local banks as partners. Last September, Moca signed a partnership with Grab to launch GrabPay by Moca, a mobile wallet integrated into Grab's app in Vietnam. Grab is also an investor in Moca.

Finhay is a micro-investment platform targeted at millennials. It allows customers to start investing with just 50,000 Vietnamese dong in mutual funds in Vietnam. Once registered, new users complete a short survey which asks about their age, career, investment goals and their likes, so that Finhay can provide a suggested investment portfolio and related risk assessment. It is backed by Australia-based H2 Ventures.

Tima, founded in 2015, is a consumer financial marketplace and peer-to-peer (P2P) lending platform. Also established in 2015, OnOnPay offers both a web platform and a mobile app allowing users to top up their prepaid phones and win rewards like extra credit and coupons, and to apply for loans. The solution is targeted at Vietnam's still large unbanked population. Last October, the startup raised an undisclosed investment by Silicon Valley fund Fenox Venture Capital.

TrueMoney Vietnam, which is part of Southeast Asian fintech company Ascend Money, operates the TrueMoney Wallet to enable users to make online purchases, pay bills and top up their pre-paid mobile and gaming cards, as well as to transfer money from their bank accounts to the digital wallet and from their wallet to other wallets. In addition to Vietnam and Thailand, it also operates in Cambodia, Indonesia, Myanmar, and the Philippines.

Unlike the above startups, TomoChain is a public blockchain promising faster and cheaper transactions designed to support decentralised applications. It is backed by some well known investment firms like Signum Capital, Connect Capital and 1KX.