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Category: Startups

Retail News Asia is committed to providing both local and global retailers with the latest Startup news throughout the Asian market. This on a daily base.

  • HCMC embraces coworking space concept

    HCMC embraces coworking space concept

    With the supply of traditional office space struggling to meet demand in HCMC, coworking spaces are becoming increasingly popular.

    Survey showed that a seat in a coworking space in Districts 1 and 3 costs $150-300 per month.

    On Nguyen Dinh Chieu Street in District 3 the cost is $150-200, while in De Tham Street, which is popular with foreigners, it goes up to $200-300.

    Rentals in Vietnam are lower than in most other cities in the Asia Pacific: they average over $400 a month in Shanghai, over $600 in Singapore and $1,500 in Hong Kong, according to real estate consultancy CBRE.

    Operators of coworking spaces said their customers are mostly freelancers, entrepreneurs and market researchers from other countries.

    They work for a short time in the city and only need a seat where they can work with their laptop, they said.

    Coworking spaces are especially popular with Japanese market researchers since they have a minimalist working style and usually travel alone, they revealed.

    As of April there were 23 coworking operators in Vietnam managing a total of 34 spaces, said CBRE.

    Growth has averaged 55 percent a year over the last five years, and the number of spaces is likely to reach 45 by the end of this year, it noted.

    Drawing attention

    The growth in Vietnam is attracting increasing attention from international firms.

    Real estate service firm Jones Lang LaSalle said last month that WeWork, the third largest startup in the U.S., plans to open a coworking space in HCMC later this year.

    It will be the largest in Vietnam at 5,000 square meters.

    WeWork acquired Chinese coworking space firm Naked Hub for $400 million last April, expanding its reach into the Asian market.

    The Hive, a Hong Kong-based operator, is planning to open a new facility by the end of this year in HCMC, according to CBRE.

    The company already has one office on Xuan Thuy Street in the city’s District 2.

    Major local operators like Toong, UP, Circo, and Dreamplex have all stepped up their rate of expansion, and the number of smaller operators with just one venue is also increasing.

    Nguyen Hong Hai, CEO of office rental service Pax Sky, said coworking spaces are now popular because the supply of office space in HCMC’s central districts is not meeting demand because of a rising wave of entrepreneurs coming there.

    He said that grade A office space in the city costs $50-60 per square meter plus tax a month, and grade B office space, $22-30.

    But occupancy rates of over 95 percent mean customers have to wait for a long time to find a good place, he said.

    There is still a lot of untapped potential in the coworking industry in HCMC because of its very vibrant entrepreneurship scene, he added.

    In Vietnam, 91 percent of people using coworking space are below 35 years of age, according to a CBRE study last year.

    This proportion is a lot higher than the global average of 67 percent and reflects the nation’s young demographics, creating robust demand, it said.

    Around 54 percent of coworking space users in Hanoi and Ho Chi Minh City are either founders or employees of start-ups, and approximately 14 percent are self-employed freelancers, it added.

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  • Gov’t Urged to Tighten Rules on Foreign Investment in Indonesian Startups

    One of Indonesia’s most influential business lobbies has urged the government to tighten its regulations on foreign ownership, taxation and user privacy at local digital startups to prevent domination by foreign entities.

    Indonesia, home to more than 260 million people – half of whom are active internet users – has seen a rise in the digital economy over the past five years.

    There are currently at least four unicorn startups in the country, but all are backed by foreign investments.

    Ride-haling service Go-Jek Indonesia received $550 million from Sequoia Capital and Warburg, and $1.2 billion from Google, Temasek and Meituan-Dianping. Online airline ticketing and hotel booking service Traveloka received $350 million from US-based travel company Expedia, while e-commerce website Bukalapak received an undisclosed amount from 500 American startups and QueensBridge Venture Partners. Tokopedia, another e-commerce site, meanwhile received $1.1 billion from Chinese e-commerce giant Alibaba.

    Over the long run, this means profit would be transferred to the investors’ countries, leading to an even larger current-account deficit, further increasing pressure on the rupiah.

    Bhima Yudhistira Adhinegara, an economist at the Institute for Development of Economics and Finance (Indef), warned that most of the startups still experience losses but foreign funding keeps pouring in, driving up their valuations.

    “Once the valuation is at its peak, they would sell their shares for a capital gain,” Bhima said.

    These startups are also well placed to harvest customer data, paving the way for foreign investors to gain a foothold in Indonesia’s tightly regulated payment and credit ecosystem.

    “It can be seen from Go-Jek that expanded its wings into a payment system. Companies such as Alipay and WeChat Pay could enter Indonesia by funding local startups with the intention to expand their scope in fintech,” Bhima said.

    “Don’t let them being too liberal like banks. If necessary, it might be better to introduce special regulations, such as limiting foreign ownership to 40 percent and requiring collaboration with domestic capital for the remainder,” he added.

    Johnny Darmawan, deputy chairman for industrial affairs at the Indonesian Chamber of Commerce and Industry (Kadin), agreed with Bhima’s assessment.

    “They aim for consumer data; that’s why they keep investing in the startups,” Johnny said.

    He also questioned the fact that despite attracting huge amounts of capital, startups are still categorized as small and medium enterprises, preventing the government from imposing limits on foreign funding.

    “Also, startups are often out of the tax authority’s scope; that’s why we must find a way to tax those that are funded by foreign entities,” Johnny said.

    Technology expert Heru Sutadi, a former commissioner of the Indonesian Telecommunication Regulatory Authority (BRTI), said it would be a great danger to share citizens’ data with foreign entities, as it is prone to abuse.

    “Citizens will be the victims. The user data belongs to citizens, while it is being exploited,” he said.

    The Financial Services Authority (OJK) banned hundreds of illegal foreign online lenders this year after a series of user-data abuses surfaced.

    Still, other businesses beg to give startups more opportunities, pointing out that Indonesia’s digital economy is still in its infancy.

    “Just let startups develop. But if they start to cause chaos in economy and make no contribution to it, they must be disciplined,” said Chris Kanter, secretary of the Indonesian Employers Association (Apindo). He believes the current size of foreign investment in local startups is still normal.

    Shinta Kamdani, deputy chairwoman for international relations at Kadin, said that instead of limiting foreign investment, more startups should be encouraged to list on the Indonesia Stock Exchange (IDX) to allow them to attract more local investors.

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  • Flipkart acquires Israeli startup Upstream to strenghten pricing capability

    Flipkart acquires Israeli startup Upstream to strenghten pricing capability

    India’s leading e-tailer Flipkart on Tuesday said it has acquired Israel-based Upstream Commerce startup for an unspecified amount to strengthen its selection and pricing capability.

    “The acquisition enables us to help sellers boost sales and serve customers better with Upstream’s advanced and data science-based intelligent solutions,” said the city-based retail giant Walmart-owned company in a statement here.

    A leader in real-time pricing and product assortment optimisation solutions, the eight-year-old Tel Aviv-headquartered startup builds cloud-based, automated competitive pricing and product analysis tools.

    “The acquisition will also help us to have an overseas centre to support our business in India with its 20-member team based in Israel,” a company spokesperson told IANS.

    Post-acquisition, the startup will continue to work in Tel Aviv and become one of Flipkart’s global centers for data science work.

    “Upstream’s solutions will enable us to give insights to our sellers, help them optimise product assortment, pricing strategy and find gaps in the market,” noted the statement.

    The buyout is in line with Flipkart’s vision to solve e-commerce challenges through innovations and will help provide wider selection and better pricing for its customers.

    “We have spurred e-commerce growth across the country and solved local problems through innovations. With Upstream, we will have tech and talent presence across Asia, Israel, the US and some global hubs for innovation,” said company’s Chief Executive Kalyan Krishnamurthy on the occasion.

    Backed by YL Ventures as a leading investor since its inception in 2010, the startup will be one of Flipkart’s excellence centres to do cutting-edge data science work.

    Upstream Chief Executive Amos Peleg said Flipkart’s choice to have presence in Israel through the acquisition was a vote of confidence in his team, technology and domain expertise.

    “We share the same passion for technology and vision for the contribution of data science in future and success of online retail as Flipkart,” said Peleg.

    Though Flipkart has been developing machine learning algorithms to improve the selection and pricing parametres for sellers and helped thousands of small and medium businesses get online, it is betting on Upstream providing it with automated pricing and planning better selection.

    “Upstream’s expertise will be a huge addition for us and our in-house AI capabilities, which will share actionable insights with sellers to help them make informed decisions on products and their pricing,” added Flipkart’s Marketplace Head Anil Goteti.

    The 11-year-old e-shopping portal claims to have over a lakh sellers and offers a whopping 80 million products across 80 categories, including smartphones, books, media, consumer electronics, furniture, fashion and lifestyle.

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  • US coworking space to set up shop in HCMC

    US coworking space to set up shop in HCMC

    WeWork, the third largest startup in the U.S., and the sixth largest in the world, is set to open a new office in HCMC late this year.

    In its latest report on the co-working space market in Vietnam, real estate firm Jones Lang LaSalle (JLL) said WeWork is looking to open an office on Doan Van Bo Street in District 4.

    The company recently did market research and customer surveys, JLL said.

    The office, to open in December, will be the largest co-working space in Vietnam at 5,000 square meters.

    JLL said the entry of global real estate startups is a positive sign.

    WeWork, valued at $20 billion last year, was one of the largest startups in the U.S., behind only Uber and Airbnb, and the sixth largest in the world. Founded in 2010 it has 250,000 employees.

    It had acquired Chinese coworking space firm Naked Hub for $400 million last April, expanding its reach into the Asian market.

    WeWork reported a rise in losses in the first half of this year to $723 million from $154 million a year earlier.

    But JLL estimates it would continue to expand.

    It said in its report: “We think Wework is likely to have a presence in most of the six Southeast Asia cities within the next 12 months. In addition, the company is likely to grow in terms of number of locations within each city as well.”

    Vietnam has seen the coworking space market expand in recent years.

    Major local operators like Toong, UP, Circo and Dreamplex are all expanding at an accelerated rate, and the number of smaller operators with just one venue is also increasing.

    The Hive, a coworking space maker from Hong Kong, is planning to open a new facility by the end of this year in Ho Chi Minh City. The company already has one office on Xuan Thuy road in District 2 in the same city.

    Real estate consultancy CBRE said the number of coworking offices in the country has grown by an average of 55 percent in the last five years.

    Most operators reported a very healthy 75-80 percent average occupancy rate as of last April.

  • Vietnam startups lack government support when it matters most

    Vietnam startups lack government support when it matters most

    Vietnamese startups do not get the financial support they need from the government at the discovery and validation stages.

    The lack of institutional support is one of major factors behind the failure of many startups to take off and thrive, experts say.

    “80-90 percent of startups fail in the early stages because they don’t have enough funding to move on to the expansion stage,” said Phan Hoang Lan, head of the Financial Planning Division under the Ministry of Science and Technology’s Market Development Department.

    Funding for startups mostly comes from venture capital funds, businesses and angel investors, not from the government, experts said at a recent conference.

    There are three periods in the development of a startup – discovery, validation and expansion, said Lan.

    It is in the first two periods that startups need funding the most, Lan said, adding that they end up raising money from family and friends or spending their own.

    This situation is very different from other countries like Singapore, where the government offers a variety of grants that can support up to 70 percent of a company’s costs.

    The U.S. News and World ranks Singapore as the 8th best country for starting a business in its 2018 Best Countries Rankings.

    Vietnam was ranked 52nd, behind other countries in Asia like Japan (2nd), South Korea (12th), Malaysia (34th), Thailand (38th) and the Philippines (45th).

    Since 2015, the government has only been investing in startups in the middle stage of their development, not in the earlier ones, said Lan, who is also the head researcher of the Vietnam-Finland Innovation Partnership Program (IPP2), which seeks to improve local support mechanisms for new innovative companies.

    “Government funding for startups should start in the early period. The government needs to be willing to accept failures in their investments, which could also bring a lot of benefits,” she said.

    IPP2 research shows that early government funding will reduce the “crowding out effects,” which is when the government’s involvement in a sector substantially affects private companies by reducing their investment spending.

    When a business has overcome the difficult period, it will no longer be dependent on the government’s capital and can source investment from other private companies.

    Echoing Lan, Nguyen Tri Hieu, an economist with over 30 years of experience working in the U.S. and Vietnam, said startups in Vietnam mostly receive funding from family and friends in their earlier stages, not from the government.

    In the U.S., startups can find financial support from the Small Business Administration (SBA), which has an annual budget approved by Congress to enable their establishment, Hieu said.

    “But this is not the case in Vietnam, where they get very limited government budget support in some cities and provinces like Hanoi, Ho Chi Minh City, Da Nang and Can Tho,” he said.

    Jouko Ahvenainen, CEO of digital finance firm Grow VC Group, affirmed the vital role of the government in supporting startups.

    The government needs to build an ecosystem to help local and international investors connect with entrepreneurs and help them expand internationally, he said.

    There should be good database of local startups so that investors can make their choices with greater ease, he added.

    The number of startups in Vietnam has seen an increasing trend in recent years, reaching 92 last year, a 45 percent increase over 2016, according to the Topica Founder Institute (TFI), which has an annual program that trains and connects startups with potential investors.

    These startups raised $291 million last year, up 42 percent from 2016, TFI said.

    Startups in Southeast Asia attracted $7.86 billion in total last year, a threefold plus increase over 2016, Tech in Asia data shows.

    Vietnam accounted for only 0.7 percent of that figure, lower than Thailand (2.2 percent), Malaysia (3.1) and Indonesia (22).

    Without government support, some potential economic development will be weakened, said economist Hieu.

    About 90 percent of Vietnamese businesses are of small and medium scale, but they create jobs for a majority of the labor force, he said.

    “The future of the economy depends on the success of startups.”

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  • More than 80 pct of IT workforce has start-up dreams

    More than 80 pct of IT workforce has start-up dreams

    A survey of 1,100 IT workers by VietnamWorks has found that 82 percent want to start their own companies in future.

    However, 58 percent said they have never been involved with a startup. Forty one percent had been involved with startups at least once.

    They listed artificial intelligence (AI), automated products and blockchain as the top 3 fields they wished to enter.

    More than half said they are willing to move overseas if presented with good offers to work for a start-up in blockchain or AI.

    A quarter of the respondents said their companies plan to expand into AI or blockchain in the next three years.

    Gaku Echizenya, CEO of Navigos Group, which owns executive search company VietnamWorks, said to lessen the danger of a tech brain drain, companies should focus on talent retention, creating good conditions for innovating products and opportunities to come in contact with new technologies.

    Now only a small number of enterprises use innovative technologies like AI (19 percent) and blockchain (9 percent), the survey found.

    World Economic Forum President Borge Brende has said Vietnam has to proactively pursue technologies related to AI and the Internet of Things as it prepares for the fourth industrial revolution or Industry 4.0 as it is dubbed.

    Eighty six percent of the respondents were optimistic about the impacts AI and blockchain would have on human life.

    They predicted AI would greatly benefit Vietnam in the next 5-10 years as it can provide people with better solutions after analyzing large data (39 percent); fully automate industry (24 percent) and create smart robots to perform dangerous tasks.

    The poll also found that more tech workers want to become specialists with focused skills and knowledge rather than be supervisors with soft and leadership skills.

    However, language proficiency was still the biggest limitation for many, with only 27 percent saying they are fluent in speaking, reading and writing English. Eighty four percent of workers in this industry have a bachelor’s or master’s degree or a doctorate.

    Earlier this month Vingroup announced the setting up of a research fund worth VND1 trillion ($44 million) for its Institute of Big Data to focus on fields like machine learning and AI.

  • Flipkart acquires AI-led startup to get next 200 million online shoppers

    Flipkart acquires AI-led startup to get next 200 million online shoppers

    In a move aimed at getting the next 200 million online shoppers to its platform, e-commerce major Flipkart has acquired Liv.ai, an artificial intelligence-led speech recognition startup. The company, however, did not disclose the deal amount.

    Post the acquisition, Liv.ai will become a Flipkart centre of excellence for voice solutions, and help accelerate an end-to-end conversational shopping experience for its users, Flipkart said in a statement.

    Founded in 2015, Liv.ai is the first Indian company to build speech to text application programming interfaces (APIs) that enable speech to text conversion in 10 Indian languages including Hindi, Bengali, Punjabi, Marathi, Gujarati, Kannada, Tamil, Telugu and Malayalam.

    US retail giant Walmart has recently completed its US $16 billion transaction to buy 77 percent stake in Flipkart.

    “The next wave of growth of internet users is coming from tier II+ cities and 70 percent of these current internet users are native/vernacular language speakers and this proportion is only increasing,” Flipkart CEO Kalyan Krishnamurthy said.

    Given the complexities in typing on vernacular keyboards, voice will become a preferred interface for new shoppers, he added. He explained that building a voice interface is complex, especially in Indian context given multiple languages and accents.

    The team at Liv.ai has been able to solve this through multiple technological innovations including deep neural net-based methods and this expertise is a big capability add-on for Flipkart, he said.

    “Ultimately, we want to give our customers a conversational e-commerce experience and believe that with the voice interface the opportunities are endless including discovery, search, engagement, transactions etc,” Krishnamurthy said.

    Flipkart said this will help build voice and speech capabilities to help get next 200 million online shoppers, who will prefer native language interaction on the web. As per industry studies, Hindi internet user base is likely to outgrow English user base by 2021 and along with Marathi and Bengali users, will drive the volume growth.

    Liv.ai co-founders Subodh Kumar, Kishore Mundra and Sanjeev Kumar, along with the entire Liv.ai team will join Flipkart as a part of the deal.

    The team under the leadership of Ravish Sinha, Vice President Flipkart, will act as a centre of excellence to drive further developing the voice solutions, integration with Flipkart app and developing use cases for various categories.

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  • Hong Kong’s Fung Group injects US$35M into India’s B2B e-commerce ShopX

    Hong Kong’s Fung Group injects US$35M into India’s B2B e-commerce ShopX

    The Fung family has invested US$35 million in Indian technology platform ShopX.

    The funds came from Fung Strategic Holdings a member of Fung Investments, the private investment vehicle of the families of Dr Victor Fung and Dr William Fung.

    ShopX is described as India’s leading B2B e-commerce company, connecting India’s consumers and small merchants with brands and suppliers directly to purchase products and services.

    India’s retail market is estimated to reach US$1.1 trillion by 2020, and small-to-medium sized businesses play an important role in the Indian economy, making up about 90 per cent of the retail sector. Until now, they largely remain ‘offline’ in small villages and towns serving the local surrounding population.

    ShopX, founded by Amit Sharma and Apoorva Jois in May 2015, aims to be the preeminent e-commerce platform serving more than 12 million small merchants across India, enabling everything from ordering to delivery, payments and localised customer support. ShopX already covers 50,000 retailers in more than 300 locations across India.

    Nandan Nilekani, a leading entrepreneur, has been an early investor in ShopX, supporting the company from inception with more than $18 million in personal investment and active mentorship.

    “The ShopX model provides small retailers access to the same cutting-edge technology and supply chain solutions as any established e-commerce or organised retailer,” he said.

    “This access provides an onboarding ramp into the formal economy for millions of India’s small retailers and the next 400 million consumers. ShopX has been built on scalable and sound business principles like platform thinking, capital efficiency and a sustainable growth model. We are very excited to welcome the Fung Group into ShopX, and look forward to expanding the platform with their investment and strategic synergies.”

    Victor Fung added: “This is one of a series of investments the Fung Group and its companies are making to advance new, disruptive technologies shaping the future of retail and supply chain. ShopX is combining technology and an innovative business model to transform the traditional retail model in India. Given the country’s sheer population size and rising consumer spending power, not only do we see tremendous opportunity in India, but also the successful application of this model to other parts of the region.”

    Tech focus

    The ShopX investment follows recent Fung Group initiatives and investments in new technologies including:

    • A partnership with Tencent-backed WeDoctor to create an e-commerce platform connecting China’s myriad of hospitals with medical device manufacturers and service providers to centrally procure medical devices, consumables and services.
    • A partnership with JD.com to develop AI-driven retail solutions.
    • A new innovation lab with Shima Seiki, the Japanese company behind the world’s most advanced computerised flat knitting machines, to conduct specialised materials R&D.
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  • Indonesia’s Bekraf opens pop up in Singapore with fashion start-ups

    Indonesia’s Bekraf opens pop up in Singapore with fashion start-ups

    Bekraf, the Indonesian Creative Economy Agency, has joined with the Indonesian embassy in Singapore to open a pop-up store showcasing Indonesian fashion startups.

    Joshua Puji Mulia Simanjuntak, Bekraf’s marketing division deputy head, described Singapore as an important market for Indonesian creative industries, particularly for fashion, as a prospective hub to reach Asean and global markets.

    The fashion industry in Indonesia contributes over half of all creative exports from the country, an economy that generated US$20 billion to 2016 figures.

    At least 14 brands will participate in the event running at Paragon Mall during August.

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  • Vietnamese startup EzQ wins two prizes at APEC meet

    Vietnamese startup EzQ wins two prizes at APEC meet

    A Vietnamese startup has won the top prize at a regional contest with a win-win business model for vendors and customers.

    EzQ won the Best Startup award at the IDEAS Show APEC 2018 held in Taiwan last week.

    Demonstrating a good understanding of user’s needs and applying technological advances for community development, the EqZ model impressed 14 judges from Creative HQ (New Zealand), Samsung Ventures, TechGrind Thailand, Plug and Play (United States), Born2Global (Korea) and Vietnam Silicon Valley to win two prizes: “Best Startup” (Jury Gold) and another reward from TechGrind.

    “For us, the trust, appreciation and comments from the judges are of utmost importance. Earlier, we were not fully confident in our business model. Now we are inspired and motivated to pursue the solution that our company provides,” said Nguyen Hoang Giang, EzQ founder.

    Starting with the needs and potential of the Vietnamese market, EzQ developed the idea of an ecosystem that links all market constituents. EzQ’s model aimed to cut back on middlemen, increasing profitability for the vendors but reducing costs for consumers.

    Using the forthcoming trend of blockchain technology, EzQ seeks to provide a secure, safe and transparent ecosystem, Giang said. In particular, it will increase income generation opportunities to students, office workers, housewives and people with idle time.

    Raphael Uranguai, Assistant Secretary/ Ministry of Commerce and Industry Trade Development and Promotion from New Guinea, commented that the business model of the Vietnamese startup showed that the digital economy was a leading area of interest in the Asia Pacific region.

    IDEAS Show APEC is an annual startup technology conference. IDEAS Show APEC 2018 was attended by 40 representatives from Taiwan, South Korea, Papua New Guinea, Peru, Philippines, Singapore and Vietnam. All the teams participating in the conference had the opportunity to visit some big and innovative startup hubs in Taoyuan, Taiwan.

    There were also exhibition booths for introducing products, and meetings held to discuss and host concept presentations from startups.

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  • Online Food Order Vietnam Rally

    Online Food Order Vietnam Rally

    The Association of Vietnam Retailers says that there has been an exponential increase in the number of people ordering food online in Hanoi and HCMC in the last few years, and it is foreign firms that are cashing in on delivering it.

    The food delivery market is now dominated by Delivery Now, and Vietnammm.com.

    Delivery Now is a product of Foody Corporation, once a Vietnamese food service startup that was acquired by Singapore-based internet firm Sea LTD last year, while Vietnammm.com is a subsidiary of Takeaway.com, one of the world’s largest online food ordering websites based in the Netherlands.

    Invested in by Ho Chi Minh City-based Scommerce Group, an information technology and services firm, Lala is considered a rising star in food delivery sector by industry insiders, having the advantage of hi-tech knowhow from its parent firm.

    Lala connects its users directly with restaurants before its shippers from Ahamove, also a child of Scommerce Group, delivers food.

    Delivery Now has already gained great popularity in the country and GrabFood poses a serious threat, Vu Hoang Tam, co-founder and director of Lala, said.

    “Obviously, GrabFood is already equipped with an army of drivers, which makes it so easy for its delivery service” he said.

    Two months ago, Malaysia-based ride-hailing firm Grab launched GrabFood in Ho Chi Minh City.

    Apart from Malaysia and Vietnam, GrabFood is now available in six others countries in Southeast Asia: Singapore, Indonesia, Cambodia, Myanmar, the Philippines and Thailand.

    GrabFood has partnered with more than 1,000 restaurants around HCMC and is expected to expand its service to Hanoi in late September and Da Nang later this year.

    But GrabFood also has certain weaknesses as it does not link customers with restaurants. Its drivers are simply hired to go to the restaurants and bring back the food requested by customers.

    There is an element of risk involved for the drivers, who have to pay for the food first and collect payment from customers later.

    Currently invested in by Hanoi-based tech firm VCCorp, eat.vn and chonmon.vn are the two names getting known in the food delivery market these days.

    While chonmon.vn targets local customers, eat.vn focuses on serving expats and foreign visitors to Vietnam.

    “If a fierce battle started around 4 years ago for the ride-hailing service in Vietnam, it is time now for a yet another battle in the food delivery market,” a company representative said.

    However there are fears that despite the strong growth of the industry, local firms could be pushed out of the game, leaving the field exclusively for foreign investors.

    Do Xuan Quang, deputy head of Vietnam Logistics Business Association, said Vietnam was the fastest growing e-commerce market in Southeast Asia, and along with the strong growth of the logistics industry at 15-20 percent, a similar movement in the delivery market is not surprising.

    In 5-10 years, the delivery market in Vietnam will be valued at around $10 billion, he said.

    This is clearly a fertile ground for businesses but if Vietnamese firms do not prepare themselves for the race, they will repeat the failure of the logistics sector, allowing foreign companies to take over the market, he added.

    U.K.-based market research firm EuroMonitor International values the food delivery market in Vietnam at around $33 million this year and at more than $38 million in 2020.

    It also puts the annual growth rate of the market at 11 percent.

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  • Food-Tech startup SmartQ acquires Goodbox’s Digital Cafeteria business

    Food-Tech startup SmartQ acquires Goodbox’s Digital Cafeteria business

    In an effort to scale up its expansion plans, SmartQ, a Bengaluru-based leading online food tech platform has announced that the company has acquired the Digital Cafeteria business of Goodbox which provides mini apps to businesses.

    The acquisition is a part of the company’s long term strategy to aggressively increase its footprint across India. Post the acquisition, Goodbox will continue its current focus on the hyper-local delivery business for groceries, pharmacies, etc.

    Speaking about the acquisition, Krishna Wage, Co-founder and CEO, SmartQ, said, “This is another important landmark for SmartQ as it reinstates our position as a leader Digital Cafeteria Business. Goodbox already has an existing customer base of 10+ MNCs across the country. Post the acquisition, SmartQ will further strengthen its digital cafeteria business by adding Goodbox’s customer base to the portfolio.”

    He further said, “Next few years are very important for us as an organization. To take the organization to the next level of strategic growth, we are further scaling up our product portfolio, service offerings and business strategy”.

    SmartQ has clocked more than 1 crore transactions in last one year. Experiencing a 50 percent month-on-month growth with over 1,20,000+ daily transactions, SmartQ has grown to 100+ locations in India and globally.

    Founded by Krishna Wage and Abhishek Ashok in 2014, the company has immensely grown its product portfolio, customer base, geographical presence and sales turnover over the years. Charting a great success story for itself, SmartQ has expanded its operations to international markets such as Singapore and New Zealand.

    SmartQ has raised close to Rs 9-10 crore funds in total. In 2016, the startup raised Rs 3.1 crore funding from YourNest Angel Fund. In 2018, the company again raised close to a Rs 4.75 crore from an investor group led by some Dubai-based investors, while existing investor YourNest also participated in the round.

    Addressing various challenges faced by employees and caterers, SmartQ enhances cafeteria and food-court experience by eliminating queues, minimizing wait time, increasing collaborative work time. By enabling corporate employees to place their orders through multiple means, SmartQ implements its innovative and cutting-edge product digital cafeteria Solutions.

    SmartQ is the exclusive technology partner with some of the largest food service providers in the world. SmartQ plans to expand their horizons to multiple other sectors where there are queue issues and ultimately remove queue from the face of the earth.

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  • Online-payment startup Paidy bags US$55m funding

    Online-payment startup Paidy bags US$55m funding

    Japanese startup Paidy has received US$55 million to build a scheme allowing online shoppers to buys goods without a credit card.

    The series-C funding was led by Goldman Sachs and Japanese trading house Itochu Corporation

    Paidy was created because even though Japan’s credit-card penetration rate is high, their usage rate is relatively low, even for online purchases. “Instead, shoppers pay cash on delivery or at convenience stores, which function as combination logistics/payment centers in many Japanese cities.”

    While that solution is convenient for cardholders worried about fraud, it inconveniences retailers because they have to maintain a pool of cash for merchandise not paid for.

    “Paidy makes it possible for people to buy online without creating an account or using their credit cards”. Instead, if a merchant uses Paidy, its customers are able to check out by entering their mobile phone numbers and email addresses. Then Paidy authenticates them with a four-digit code sent through SMS or voice. Every month, customers settle their bills, which include all transactions they made using Paidy, at a convenience store or through bank transfers or auto-debits (installment and subscription plans are also available).

     

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  • Vietnam part of attractive Southeast Asian start-up scene

    Vietnam part of attractive Southeast Asian start-up scene

    The trend of investing in Southeast Asia start-ups gained momentum in 2016-17, including in Vietnam, though the country has yet to get its “unicorn,” or a privately held start-up with a valuation of $1 billion or more.

    “I think one of the reasons start-ups in Southeast Asia get such attention from foreign investors is the ‘unicorn’ companies, which attract talent from other countries to the region,” KK Fund’s general partner, Kuan Hsu, said.

    “In contrast to Vietnam and Malaysia, which are yet to have any unicorns, Indonesia already has four companies in this category.”

    Vietnamese start-ups received $61.5 million worth of investments last year. But Topica Founder Institute (TFI) said it is much higher than that, with $300 million invested in 92 different deals, and potentially even higher.

    Hsu said that Vietnam and Indonesia are favored destinations for anyone looking to start companies because they have big populations on top of large numbers of young people, and thus have huge consumption potential.

    Nikhil Kapur, head of South Asia, GREE Ventures, agreed with that view, saying Vietnam shows many promising signs of becoming a start-up nation though it is still at an early stage.

    “We will evaluate annually to determine Vietnam’s potential growth for start-ups. But at the moment, we need more time to carefully study the market because Vietnam is different from other countries in the region. Some businesses are on the right path to becoming a successful company.”

    Research shows there is a new start-up for every 57,982 people in Vietnam. According to the website Worldometers, the country had roughly 1,664 start-ups.

    But Hsu said the nationality of founders does not matter when counting the number of start-ups in a country, only where the businesses are registered.

    For instance, Loi Luu, a Vietnamese entrepreneur and the CEO of Kyber Network, registered the business’ headquarters in Singapore. As a result, this successful company, listed among the 50 most successful start-ups in Southeast Asia in terms of attracting investments, is considered Singaporean.

    Now e-commerce is the most popular sector with foreign investors.

    The Vietnam E-commerce Association said the country’s e-commerce market grew by 25 percent last year and this rate is expected to continue through 2020.

    Last year the sector saw 21 deals worth $83 million, the highest of all sectors.

    It was followed by culinary technology, financial technology, communications, transportation, and online travel.

    The start-up to attract the highest funding was Foody, which received $198 million from Sea Group for an 82 percent stake.

    Sea Group also bought two unnamed companies in logistics and financial technology for $64 million and $50 million.

    Rounding off the top six were Tiki ($54 million from JD.com Inc), an unnamed company ($20 million from TNB Ventures) and Vntrip ($10 million from Hendale Capital).

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  • Airwallex rings up US$80 million from Tencent and Sequoia

    Airwallex rings up US$80 million from Tencent and Sequoia

    The Melbourne-based startup announced today a US$80 million series B led by Tencent and Sequoia China and joined by Asia-Pacific investors Hillhouse Capital, Horizons Ventures, Central Capital Ventura, and Square Peg Capital.

    The deal is believed to be the second largest in the country, and is the largest raised by a startup in Australia this year.

    Airwallex provides cross-border transactions and money transfers.

    It will use the funding to expand in Southeast Asia, starting out with Singapore and Hong Kong.

    Airwallex co-founder and chief operating officer Lucy Liu said that some banks had technology that constrained their ability to deal with new payments possibilities, and that it therefore needed to have funds to build its own solutions in some cases.

    “The user interface and user experience will only get us far, so with this round we’ll be looking for more licences in key banking areas, either via acquisition or applying for our own,” Ms Liu said.

    “The regulatory deposits required for this are one of the reasons we’ve raised so much.”

    For instance, Ms Liu said Airwallex would consider a virtual banking licence in Hong Kong, with “financial inclusion” of small-to-medium enterprises throughout the region an aim.

    “So many SMEs, including in Australia, are trying to grow internationally but are hit by barriers around payments and foreign exchange,” she said.

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