Korean fintech super app plans to expand to Vietnam market

, Korean fintech super app plans to expand to Vietnam market

Recently, Viva Republican, one of Korea’s most valuable fintech startups, announced a plan to raise 1 billion USD with a campaign to expand the Toss super app into the Southeast Asian market, challenging rivals such as: Grab, Momo, GoTo, etc.

Previously, the start-up successfully raised $ 410 million in June from investors such as GIC, Paypal and Sequoia Capital China. With the company’s current valuation at $7.4 billion, the company’s leadership is aiming for another round of funding before its initial public offering. To date, the company has successfully raised $940 million in equity.

After entering the Vietnamese market in 2019, Toss has so far attracted 3 million users with services such as money transfer and credit cards. In the next phase, the company aims to promote to five other Southeast Asian countries, including: Indonesia, Malaysia, Thailand, Philippines and India. This will also be where Toss has to go head-to-head with Singapore’s Grab and Indonesia’s Goto, the two largest technology companies in the region.

Founder and director of the company, Lee Seung-gun said in a recent interview: “We never thought of ourselves as just a player in the Korean market… The restructuring campaign became one of our super apps is very exciting for investors.”

The Korean fintech market is flourishing on the back of deregulation in the country’s financial industry as well as a growing number of young financially savvy consumers. Toss has a total of 11 million active users in South Korea, according to Lee.

Viva Republica’s sales last year also doubled, to 820 billion won ($676 million). Toss contributes to this revenue through its suite of financial services, including online banking, stock trading and insurance.

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“Every fintech company in the nationwide market always wants a multi-functional supplier,” said Lee. “We already have a recipe for success from what was achieved in Korea, and we are trying to repeat that success in Southeast Asia.”

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In Vietnam, Toss is adding 500,000 active users each month to gain market share with rival Momo, an app with more than 78 million registered users. Toss is providing credit card services and short-term loans through links with local banks.

Korean financial firms have faced many barriers to entering foreign markets despite the high demand for cash. Rivals in the Korean market, Naver and Kakao Bank, are vying for tickets to the Southeast Asian market, but Lee emphasized that his company is taking a targeted, analytics-focused credit approach and in-depth study of consumer behavior.

“We are not going to pour tons of dollars just to be the leader. We will try to study consumer ‘itches’ and address them as best we can.” – he said.

But analysts say that Toss’ entry into the Southeast Asian market will be an arduous journey. The reason is that regional competitors such as GoTo and Grab have very strong potential and have built a fintech ecosystem on top of a large car rental application’s database.

“They have a chance to break into those markets if they find the right local financial partner,” said Lee Sung-bok, a researcher at the Korea Capital Markets Institute. But there are already hard-core local players out there, so it won’t be easy for Toss to find a new service to fight them.”

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@ Financial Times

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