Vietnamese digital banking startup gets 20 million USD
According to Techinasia, Vietnam-based bank Timo has raised $20 million in an investment round led by Square Peg.
This is a famous investment fund that has invested in technology unicorn projects such as Canva, FinAnce and Airwallex.
In addition to Square Peg, Jungle Ventures, Granite Oak, Phoenix Holdings and several other angel investors also participated in this funding round.
This is Timo's first fund-raising round. Proceeds from investors will be used to develop the base technology, with a focus on products specific to the Vietnamese market.
Established in 2015, Timo is a provider of digital banking services that enables users to make payments and participate in other financial services without having to go directly to a bank branch. Timo users can even open a bank account without going to a bank for registration.
Timo's successful funding round comes in the context of increasing digital banking products in Southeast Asia, especially in Vietnam.
According to McKinsey & Company Vietnam, the percentage of service users of Fintech (financial technology) companies in Vietnam increased from 16% in 2017 to 56% in 2021.
The popularity of e-wallets and Fintech in Vietnam is higher than the average of emerging markets in the Asia-Pacific region and even higher than some developed countries.
Cash is still the "king" in all payment segments in Vietnam. However, the openness of Vietnamese users to e-commerce is very high. Consumers are willing to spend digitally, even with complex financial products involving mortgages, investments, and insurance policies.
McKinsey & Company also said that the scale of Vietnam's digital ecosystem is estimated at 50 billion USD and can increase to 100 billion USD by 2025.
Before Timo, another Fintech startup in Vietnam – MoMo - announced the completion of the 5th round of funding (Series E) with a total investment of about 200 million USD. This deal also turns MoMo into a technology unicorn when it is valued at up to 2 billion USD.
The Covid-19 pandemic has contributed to promoting the development of digital payments in Vietnam as both people and businesses have formed awareness and understood the value of cashless payments. The habit of non-cash payments will not only be maintained but also will continue to be promoted in Vietnam in the post-pandemic period.
Total funding into Vietnamese startups over the past year is likely to have reached a new high with more startups crossing over into a unicorn status.