A series of mergers and acquisitions (M&A) in payment intermediation, finance and technology (fintech) are making this field attractive.
Bloom up M&A intermediary payment companies
In the coming time, the M&A market will likely witness a big deal in the fintech sector. DealStreetAsia reported, SoftBank Vision Fund was promoting a $200 million investment in VNPay. At the same time, GIC also offered to pour $100 million into this Vietnamese intermediary company.
In early 2019, payment intermediary company Momo announced the receipt of an unprecedented large investment in the Vietnamese fintech industry from investor Warburg Pincus. According to Crunchbase, the latest investment into Momo was worth $100 million and so far Momo had raised $133.8 million.
Another deal, VinID Joint Stock Company with 80 percent owned by Vingroup also completed the procedures to acquire the MonPay electronic wallet platform in early 2019. The value of the deal has not been disclosed.
Besides, the market recognised the remarkable merger of Vimo e-wallet and mPOS (both are members of NextTech Group) and changed its name to NextPay. After the merger, NextPay uses the intermediate payment license of Vimo e-wallet and is negotiating with investors to mobilise about $30 million in the Series B round.
In addition, a series of other deals have been carried out such as Moca e-wallet has a strategic partnership with Grab. Market information said Grab had bought Moca’s shares for $3 million from the $10 million valuation; Tomochain mobilised $8.5 million with the Initial Coin Offering (ICO) in 2018; Tima also announced that it had mobilised a $3 million Series B round from Belt Road Capital Management in October 2018, with a valuation of nearly $20 million; Finhay mobilised nearly $1 million from foreign partners, etc.
According to “Annual report on investment in Vietnam startup in 2018″ by Topica Founder Institute (TFI), fintech field is leading in attracting investment in 2018 with eight deals, total price worth $117 million. At the end of 2017, there were $4.4 billion poured into this field and is expected to double by 2020. Fintech in Vietnam is growing very fast, fintech application in Vietnam are also diverse, including e-wallet, payment intermediary, peer-to-peer loan, credit scoring, mobile payment, etc.
The competition is not easy
The results of the global consumer survey in 2019 published by PwC showed that the proportion of consumers in Vietnam using mobile payment increased from 37 percent in 2018 to 61 percent in 2019.
This is a potential land for development of intermediary companies
Nguyen Ba Diep, vice Chair of M_Service, owner Momo said, this was the “golden” time for the development of the e-payment market, because it had met favourable factors.
Firstly, Vietnam had a large population, especially young population, able to access new trends and new life styles quickly.
Secondly, Vietnam had an initial ecosystem formed to promote and support the cashless payment.
Thirdly, the government of Vietnam was promoting and supporting that market development with policies for a cashless economy.
“From the end of 2018 until now, many large companies involved in payment intermediaries such as Grab boughtMoca, VinGroup bought MonPay, etc. This is a very good signal, because large companies only invest when the payment market has real potential and real demand. The government also has many moves to support non-cash payments, so it is clear that the Vietnamese market will be a potential place for e-payment to grow. I am confident that large companies are looking for opportunities to join this market through M&A”, said Nguyen Ba Diep.
Currently, Vietnam has 29 companies licensed non-bank payment intermediary services, about 20 of which provide e-wallet services. More than 40 banks have also provided mobile payment services, 78 fintech companies have licenses, indicating that the market is in fierce competition.
According to Marc Einstein, ITR Japan expert, Southeast Asian companies were seeking to rely on the success of the giant in online payment Alipaypart of Alibaba and WeChat Pay of Tencent. It was really a big fever, but in the end, there would only be one or two names that could survive.
On the other hand, according to Frederick Burke, Head of the Investment and Trade Working Group Frederick Burke, the legal framework for fintech in Vietnam was not yet complete. The law of Vietnam had not specified business lines for peer-to-peer (P2P) lending, and enterprises were not sure which business lines they must register to provide that service in Vietnam.
