Momo: Meet Vietnam’s Venmo

June  07, 2016

Vietnamese fintech disruptor Momo has been lauded as Vietnam’s Venmo. Early in March, it raised a $28M round of investment from London-based Standard Chartered Bank and New York-based Goldman Sachs. Standard Chartered Private Equity (SCPE) put in $25M to lead the round and Goldman Sachs committed another $3M to their previous $5.7M investment.  Momo has 2.5 million customers, one million of them utilizing the e-wallet feature.

Momo provides a solution to the common global cashflow problem where people do not have bank accounts, or the ability to get credit or debit cards. Momo serves this large sector of people with their Straight2Bank wallet app which enables companies to deposit, withdraw and pay bills for banked and unbanked individuals cashlessly. Momo is the first company in Vietnam licensed by the State Bank of Vietnam to provide a mobile wallet catering to the unbanked population.

The company’s wide range of payment applications makes it a comparable to immensely successful e-payment provider Venmo. Considering how successful Venmo is in North America – regularly handling over $2 billion worth of transactions in three month periods – Momo could be sailing on a strong tailwind. This is more likely given Momo’s success in a market where a larger portion of the population is unbanked, making its service more necessary.

If Momo continues to deliver in Vietnam, it could follow a path similar to Venmo’s, but with access to the much larger Asian market.

The company offers two services in Vietnam: a mobile wallet and payment app, launched with SCB last year, and a “branchless” banking service for those without a traditional bank account. The company continues to grow their customer base daily.

Smartphone ownership Vietnam is growing rapidly amongst its population of 90 million, with one-quarter of the population under age 25. The strong potential for innovative technology to gain mainstream attention is evident.

Momo is looking to take advantage of these conditions and use mobile technology as the vehicle for payments and banking in Vietnam, where credit card adoption is low and banking is not always available in remote areas.

Pham Thanh Duc, CEO of M-Service, the parent company of Momo said its e-wallet is designed to adhere 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 works with more than 100 service providers and over 4,000 independent agents on the payment app side of its business, for a network where customers can load cash into their accounts, withdraw funds, schedule and pay bills, while having visibility to their balances.

With the new $28M infusion of capital, Momo plans to grow its banking network to 11,000 agents in 2017 while also increasing their 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, but the company is firmly in startup mode and keen to explore the possibilities around mobile payment and banking in Vietnam. “Goldman Sachs can see the opportunity in this industry, and will take off one day in Vietnam,” Duc said. “They are a longer-term investor.”

Duc said 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 IndoChina and Myanmar.”