Vietnam's fintech landscape poised for significant growth

According to an industry report by Acclime Vietnam and supported by Decision Lab, the fintech landscape in Vietnam is poised for significant growth, mainly driven by the vibrant economy, growing middle class, strong regulatory support and increasing smartphone penetration.

Investors should also consider the large unbanked population and cash-based businesses, offering a significant opportunity for fintech solutions to penetrate the market.

Additionally, the rise of fintech startups in the country signifies a shift towards a more inclusive and accessible financial ecosystem. According to the State Bank of Vietnam, the number of fintech companies in the country has quadrupled in the last few years, from 39 companies at the end of 2015 to more than 150 firms in 2021.

The growth of fintech in Vietnam has not gone unnoticed by international investors. The country has become an attractive destination for venture capital firms, who recognise the vast opportunities and the untapped potential of the market.

However, this influx of investment saw a drop amid global headwinds. According to UOB, in 2022, Vietnam saw a reduction in their share of investments as the number of deals decreased compared with 2021.

Vlad Savin, head of Business Development at Acclime Vietnam said that the funding of startups (particularly late stage) was difficult currently as there was more emphasis on sound business models and unit economics vs top line and user growth.

However, from a midterm and earlier stage perspective, the regional and Vietnamese fintech market was attractive as many segments are not saturated yet.

He added that many fintech firms lack scalability. 99 per cent of the time ambitions and capabilities of local startups do not go beyond country borders.

However, from a long-term investor perspective, Binh Tran, co-founder of Ascend Vietnam Ventures believes Vietnam will continue to breed fintech unicorns with regional and global competencies.

The goal for Vietnamese fintech is to either solve fintech issues specific to emerging Asian markets or to penetrate developed markets like the United States. Companies like Trusting Social and Anduin Transactions have already demonstrated this dual approach capability.

Recently, several Vietnamese entrepreneurs have continued to raise money effectively in the middle of the 2022-2023 global monetary crisis, closing a total of nine deals, including Finhay at $25 million), Timo for $20 million), and VUIAPP with $6.4 million. The statistical data illustrates the optimistic attitude of investors towards the potential for fintech development in Vietnam.

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