Vietnam was the second-highest ASEAN recipient of financial technology (fintech) venture capital, according to a recent report by United Overseas Bank (UOB), PwC and the Singapore FinTech Association (SFA).

The three recently released their 2019 ‘Fintech in ASEAN report: From start-up to scale-up,' an annual review of growth in the region’s fintech sector.

According to the report, venture capital investment in Vietnamese fintech companies accounted for 36 percent of total fintech funds in Southeast Asia, a drastic jump from 0.4 percent last year.

Singapore brought in the most fintech funding in ASEAN with 51 percent, down from 53 percent last year. 

Meanwhile, Indonesia fell from second to third place with 12 percent, compared to 37 percent the year before.

The most popular fintech sector for venture investments in the Vietnamese market was payment, a common occurrence in economies with immature fintech sectors, the report said.

Meanwhile, funding for Singapore-based fintech firms was spread relatively evenly across several fintech categories while investors in Indonesia focused primarily on alternative lending firms, a phenomenon fueled by a strong demand for credit by the country’s growing middle class.

Vietnam’s sharp increase in funding this year is due to large deals – a US$300 million investment in VNPay and $100 million channeled into Momo Pay’s Series-C fundraising round.

These two Vietnamese digital payment companies also rank first and third, respectively, in the top ten funded fintech firms in Southeast Asia.

Singaporean insurance company Singapore Life inked the second-largest investment deal in ASEAN, worth $110.3 million.

The report also noted that interest in investment in fintech firms in Vietnam is driven by the business potential given its large and underbanked population, as well as high mobile and Internet penetration rates.

UOB cited data by the State Bank of Vietnam, saying that as of March 2019, the number of financial transactions conducted on mobile phones was nearly double that from 2018.

Vietnam's mobile payment market is projected to reach $70.9 billion by 2025, a $16 billion rise from 2016.

In addition, Vietnam is the fifth-preferred market for investment by non-ASEAN fintech firms, trailing Singapore, Malaysia, Thailand and Indonesia, with 13 percent of firms having announced plans for expansion into the country.

Vietnam was also praised by some interviewees for its efforts to promote and regulate the fintech industry, the report said.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!