Why many companies of banking fintech don’t choose Shark Tank for startup seed funding?

The most popular reality TV game show in Vietnam regarding startups and funding is Shark Tank. Numerous entrepreneurs have benefited from the chance to fund the program and are growing, including: DatBike, Hoa Nang organic rice, Truong Food sour pork, Vina Chuoi, etc.

However, very few fintech businesses have found success in this program, and almost all their requests for funding have been turned down. Examples include MoneyBot, a tool that aids in budgeting, and HanaGold, a chain of jewelry stores that uses 4.0 technology to manage its operations.

Why doesn't any banking fintech firm use Shark Tank as a venue to acquire financing, as opposed to companies like the ones mentioned above that frequently fail on the show? Let's find out the aforementioned problem with FinFan in this article.

Why did these companies above fail in Shark Tank?

Companies that take part in the Shark Tank show typically fail for three reasons:

The business model is old or has not met the market demand or is too risky.

• The business model is old

MoneyBot is a good illustration of an outdated business model, and several significant market participants have taken advantage of this industry.

There is one very famous shark in the startup world, which is Shark Binh when he commented.

MoneyBot's features are normal at the current level of technology. Many applications are now completely free and make money from ads, not just free for 6 months like Moneybot. Besides, because it was born late, it certainly takes 3 times the cost to win customers from the hands of the previous competitors.

• The business model has not met the market demand or is too risky.

HanaGold is a startup that provides distinctive and cutting-edge technological solutions, in contrast to MoneyBot. However, because the app developer is also the gold supplier, the sharks view this model to be highly hazardous, which can cause two issues.

• • Customer demand may be more than the amount of gold that HanaGold's stores can supply, which means the business will not have enough gold in reserve to exchange for customers and the business model is vulnerable to fraud.
  • Customers can hardly trust an unknown business in the market to create an app and provide gold themselves.

HanaGold just needs to work with well-known gold shop chains in the market, like PNJ and SJC, or other small gold shops in the market (where customers most frequently visit and also nearest to where they reside), in order to solve these two issues.

HanaGold, however, finds it challenging because Finhay, another powerful player in the wealth technology sector, has thought about this possibility and has run it for 3 years.

Why many companies of banking fintech don’t choose Shark Tank for startup seed funding?

What is banking fintech enterprise?

In the essay Investment banking fintech in Vietnam - Why and why not? We’ve already known about the definition of banking fintech and some of the business lines these businesses typically offer.

Why doesn't any banking fintech firm use Shark Tank as a venue to acquire financing?

There are many reasons why banking fintech businesses do not participate in the Shark Tank program for their startup seed funding round, but the three outstanding reasons are the following:

• • The first reason is that fintech banking is a field that needs a lot of funding to flourish since it combines banking, which already needs a lot of funding, and technology, which is renowned as a commercial sector that drains money quickly.
  • The second reason is that fintech banking businesses are often backed by banking tycoons and create favorable conditions for them to have the opportunity to develop. Sometimes even the big guys in the traditional banking industry have started to participate in this game extremely aggressively. That is shown in the article “List of transforming digital banks which have the most users in Vietnam”.
  • Despite being a shark, the investors in the program are very few who are in the banking sector or some other fintech models.

Great examples of not participating in Shark Tank and still succeeding

Such was the case with Timo when this digital bank was first launched to the public in 2015, creating a wave of digital banks and NEOBank later.

Emerging as a phenomenon and creating a wave of digital banking, Timo is not a contestant on Shark Tank. They relied on the initial investment from VPBank, a bank known to be very interested in digital transformation from the beginning.

Timo can be viewed as VPBank's incredibly successful test in digital banking because, following that, this bank developed its own, analogous digital banking models, achieved great success with digital banking, and signed numerous agreements with other significant partners in the market.

Timo, which just incorporated further cutting-edge tools to manage to spend akin to the MoneyBot model stated above, is still now the most popular digital bank in the Vietnamese market.

Another example of NEOBank is FinFan, a Neobank specializing in cross-border payment and money transfer in Vietnam, had a License of Foreign Currencies Acceptance and Payment approved by the Central Bank of Vietnam in 2014, licensing from our Strategy Bank to do Banking services, and was the first entity in Vietnam allowed to disburse money into E-wallet.

We operate based on the values of transparency and trustworthiness to provide products as a Neo-bank, such as CASH – IN & CASH –OUT (Payroll, e-Commerce, Import-Export, etc., Cross - Border Payment (Over 150 countries + currencies), Remittances (strong currencies like GBP, AUD, EUR, USD, CNY with competitive FX rate), Virtual Cards.

We are proud that we not only became the first Vietnamese non-bank partnered and integrated with Ripple Net but also partnered with over 20 top global brands as MoneyGram, Thunes, Remitly, Ria, Terrapay, PaySend, etc.