During the second quarter of 2021, several startups managed to fundraise miraculously in such turbulent environment. Kudos to them. This article is about covering them and look at them from a specific angle.

Usually, startups fundraise with the promise of great revenue growth after the funding happens. The truth is having a lot of fuel doesn't necessarily lead to a successful rocket launch. It's a necessary condition though and that's ok. Let's take a look the 3 startups that may build a successful rocket in Vietnam and their chance to hit the moon.

Most of the startups usually die, even after a successful funding round. The analysis and the tone might be a bit too dark for some. We'll just provide our take on each startup and share what we think with a few metrics in mind.

Nano Technologies - Source is from Techcrunch

Type of round : Seed

Amount : 3,000,000$US

Industry : Fintech

Investors

FEBE Ventures, Venturra, Golden Gate, Open Space Venture, Good Water Capital

What is the service?

It lets workers in Vietnam access their earned wages immediately through an app called VUI

Who pays for the service?

Employees or employers or both bear for the fee

Traction

More than 20,000 employees have signed up within 6 months.

Founder and current CEO

Dzung Dang, formerly a general manager at Uber and chief executive officer of ZaloPay in Vietnam and formerly working for McKinsey.

A recent interview about Dzung about Nano

Challenges ahead for this startup

Constant need for additional funding

The revenue model requires a large amount of capital in order to handle the cash flow as the company grows its user base. The 3 million USD might be then justified and more capital might be required in the future to meet the growth capital demand.

Barrier to entrant is low

Another issue is the lack of technology or the unfair competitive advantage of Nano. In the coming 36 months several competitors can dive in that space and increase pressure on costs with even lower margins.

Traction to keep up

The bet is really about the ability to reach quickly a critical size to become the key player. That means to acquire as many companies as possible and most importantly drive up the usage activity to generate revenue.

Final words on Nano Technologies

Key metrics to follow is the number of companies that signed up with Nano and the actual numbers of loans given monthly to the employees. If they're able to close consistently more than 10 companies with the size of 500 employees every month and half of the employees are using the service to get a loan of 500,000 VND and Nano makes 5% on it. That's 25,000 VND in revenue per loan or a bit more than 1$. 2,500 people doing this monthly and that's a bit more than 2,500$US.

Assuming the company spends only 50,000$US every month and Nano making a bit more than 1$ per loan, they would need to give 50,000 loans monthly to breakeven on the P&L. To reach that level that means they'll also need to have some cash ready to give to the employees requesting for the loan.

Let's see first if Nano can start onboarding enough companies in the next coming 12 months.

Mfast - Source is from Techcrunch

Type of round : pre-series A

Amount : 1,500,000$US

Industry : Fintech

Investors

Do Ventures, JAFCO

What is the service?

It lets Vietnamese users in remote areas access financial services such as loans or insurance.

Who pays for the service?

When you're going on the website, the homepage states how to make money. Bottom line, the end users make money whenever they bring in a new customer ( for a financial product). That's likely how Mfast is making money as well and remains a platform.

Traction

Over 200 million USD in financial products disbursed through Mfast since 2019

Founder and current CEO

Phan Thanh Long and Phan Thanh Vinh are the co-founders of Mfast.

Challenges ahead for this startup

The model is quite odd as it means people will be around the country with their Mfast app closing deals for financial institutions and get commissions each time it's done. For financial institutions that's a great new sales distribution channel and it seems like many have been onboarded based on the information retrieved on the website.

Based on the traction, the bet is to acquire enough users to generate successful deals for financial institution. The game is to properly allocate the capital and figure out a way to have 6 million people ( 10x from the number given in the press ) every year signing up for financial products.

I see really small presence online at the moment, the money might be used for that, unless the team decided to use a different approach on user acquisition with a more efficient customer acquisition cost with a better lifetime value, let's see.

All the financial institutions are willing to have more sales distribution channels, the critical key success factor is to onboard these people using the app to make money and scale it up across the country.

Mio - Source is from Techcrunch

Type of round: Seed

Amount : 1,000,000$US

Industry: E-Commerce

Investors

Venturra Discovery and Golden Gate Ventures

What is the service?

Another e-commerce platform focused on Tier 2 and 3 cities in Vietnam

Who pays for the service?

Traditional e-commerce model taking a fee on the transaction from the merchant.

Traction

There's no real traction yet but some other startups have been successful doing the same in India ( Meesho ) and China ( Pinduoduo ).

Founder and current CEO

Trung Huynh, former employee of IDG Ventures

Challenges ahead for the startup

That startup was launched on the fact that it's been done in other countries. Even though e-commerce is fine, I believe that replicating models from China and India will not be easy and thinking. The population size is not the same and therefore the market size as well.

Another problem that can come quickly is from the founder team. The CEO is a former investment person and will usually have low resilience to failures. That's something interesting to follow as that's my personal assumption and I hope to be wrong on that one.

Eventually as every traditional e-commerce platform, 1 million USD is just to get started. E-commerce is a disguised word for logistics. The front end has to be nice for consumers but at the end, it's all about ability to deliver the products to the consumers with the lowest cost and shortest amount of time. As mentioned earlier about the e-commerce trends, Grab is more likely to win on that one.

Personal conclusion on that startup is that if the CEO is able to build a top notch team, obtain a 50% traction month over month and build some unfair competitive advantage and raise more than 10 million USD in the next round then Mio will be able to survive another 36 months.