Startup funding in Vietnam – which industries have the most special attention from investment funds? (part 2)

So we know that e-commerce is one of the most special attention from investment funds and how the merchants on international e-commerce platforms can create a PayPal account for their stores.

In this article, let’s find out with FinFan another industry, that also has the most invested funds by the venture capitals. The top 10 venture capital funds that invest much in the fintech segment are also mentioned in a previous content of FinFan.

Fintech – new wine in old bottles definition

The growth of fintech since the 19th century around the world

Fintech 1.0

It can be said that the fintech industry was born nearly 200 years ago when scientists began research in 1838 and laid cables across the world.

The first successful Atlantic Ocean was in 1866 by the Western Ocean Telegraph Company provided the basic infrastructure for the first phase of financial globalization at the end 19th century.

Then came the introduction of automatic teller machines (ATMs) in 1976 by banks Barclays which arguably marked the beginning of the modern evolution of Fintech today.

Fintech 2.0

Then the emergence of the Internet set the stage for the level. Further developments, starting in 1995 Wells Fargo used the World Wide Web (WWW) to provide online account checking. Accompanying the development of Fintech is the development of web versions. The birth of Web 2.0 has served as a foundation to support... development of Fintech 2.0.

Fintech 3.0

Fintech 3.0 technology started in 2009 after the financial crisis of the century caused many large banks in the US to collapse (typically Lehman Brothers in 2008).

Many people began to doubt the ability to keep cash in their bank would be more or less affected by inflation, recession as well and the policies of pumping money into some bubble operations of the leading monetary authority of a country or region Sector (Central Bank).

The beginning of this problem probably came from the birth of Bitcoin by a certain individual or secret organization named Satoshi Nakamoto and the development of the cryptocurrency market until now.

This is a warning bell that forces banks to be more transparent and find ways to provide information faster and more accurately to their customers.

This leads to the transformation and digitalization of banks, thereby giving birth to a new concept of the banking industry, digital banking or NEOBank.

The growth of fintech in Vietnam

Actually, following the world's development trend, Vietnamese fintech, although late, still catches up with these development stages of fintech.

Especially with the rapid and strong development of the fintech generation 2.0 to 3.0, the young Vietnamese generation has caught up and has even raised Vietnam to the top of the world in terms of the adoption rate of cryptocurrency currencies, trading rate on large cryptocurrency exchanges like Binance, as well as the proportion of the world's top projects in NFT games (typically Axie Infinity).

On the other hand, the pace of development of digitalization of the banking industry is also carried out strongly. The evidence is that now, since the first digital bank, Timo, was launched in 2015, the trend of using digital banking in Vietnam has increased rapidly because of its convenience. Because of this, traditional banks quickly grasped the trend to digitize services and further position their brands in the eyes of young people.

Why is fintech an industry that big funds are interested in investing in?

• Timeliness

Timeliness is always a prerequisite for this industry because it involves money or other objects of equivalent exchange (things we use every day for exchange and purchase).

Remember that Bitcoin was born because of the desire to change some old payment methods that were outdated and easily caused disadvantages in trading when they were the cause of inflation and bursting bubbles in some other fields (typically the .com bubble in the early 2000s or the real estate bubble in 2007-2008).

• Have specific numbers and easily predict the future situation

Imagine you invest in a service startup. When the market fluctuates, that service also fluctuates and leads to bankruptcy.

At this point, your investments can easily fly away or be difficult to control because they have to take another step to convert or be valued at the same level as the currency at the time of the crisis.

This contrasts with financial markets where numbers dictate reality and help influence other manufacturing and service industries.

For example, you can predict that a recessionary economic cycle will occur and take appropriate actions to reduce or increase investment cash flow without requiring a further conversion step from the existing product or service, something that makes money at that time.

Then, your decision will be easier, and you will always have enough cash to consider other industries that are developing at that time and invest in them.

• High profits

The risk here when investing in a fintech company is that they are always affected first and last by crises. However, the higher the risk, the greater the profit. Investing in a fintech company means you are investing in potential businesses that can help the market quickly solve the need for money capital - one of the 4 most important capitals that any startup or business must have in its development process the market (4 most important capitals are: knowledge, human resource, vision, and money).