PropTech: What to expect in Vietnam ?

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Proptech: What to expect in Vietnam ?

Overview about Proptech

In recent years, technology has become an important part of the real estate value chain: from marketing, sales, property management to customer care. Moreover, Covid-19 has created unprecedented pressure on the real estate industry – which is quite “conservative” to technological innovations.

Proptech, or property technology, has developed strongly in Viet Nam with many start-ups being launched and attracting investment from major players and many services being developed to meet market demand.

In the world the total value of real estate tech deals in 2020 was nearly $7.3 billion, according to data from Statista. In the two years 2020-2021, when the global investment capital flow for the Proptech field reached over 10 billion USD/year, leading markets in the Proptech field in Asia such as China, Hong Kong, and Singapore also started to receive an impressive investment capital of about 700 million USD.

Statistics of Fintech Global showed that a sum worth $7.1 billion was poured into proptech globally as of the third quarter of 2021, 122 per cent higher than that of the full year of 2020.

Neil MacGregor, an expert in Vietnam, said that in the period from 2019 to 2020, the market witnessed exciting activities of investors involved in technology development, especially in the field of real estate – proptech, including asset management – real estate, sales platform and fintech investment-oriented platform exploiting real estate. in this field, said that Vietnam’s potential is a total population of more than 97 million people by 2021. The real estate market is still in a nascent stage with many problems to be solved. Proptech has the ability to provide solutions to overcome these backlog problems.

Proptech Ecosystem in Vietnam

According to research by the Vietnam Real Estate Association, the scale of Vietnam’s real estate market is likely to reach $1,232 billion, accounting for 22% of the total economic assets by 2030. Investment deals and capital contribution into proptech shows that the heat in this field is growing.

According to the data of PropTech Vietnam Network, there were about 150 proptech startups in the market as of 2021, providing listing services and e-commerce platforms according to the model. Marketplace model, electronic brokerage, investment and crowdfunding, asset management and network management of Internet-connected devices, co-working spaces, construction and equipment works utilities, virtual reality, valuation and analysis, hotel management, office leasing.

In addition to Proptech companies, the Proptech industry ecosystem in Vietnam also includes support centers (Accelerators) and community building centers (Community Builders) to support startups in the industry. These centers include Startup.vn, Zone Startups Vietnam, Topic Founder Institute, Vietnam Silicon Valley as well as startup hubs in Ho Chi Minh City such as Saigon Innovation Hub, 500 Startups Vietnam early-stage investment and support center.

Source: Protech Vietnam Network

Increasing number of players in the field

Proptech in Vietnam has come a long way in the last 18 years. Currently, about 80% of players in the market are foreign start-ups or start-ups funded by foreign investors. Not only foreign investors, but local venture capital funds and companies are also invested in Vietnam’s emerging proptech industry.  Some of the famous apps and proptech products include Saas, Propzy, Go2Joy Vietnam, Citics, Homebase, and A.Plus Home. They have successfully raised capital from foreign investors.

Furthermore, proptech companies in Vietnam have started to collaborate with fintech players. We expect the residential sector, given the level of investment and consumer engagement, to be the first to connect proptech and fintech.

The increasing heat in the field can be seen in investment deals, contributing capital to proptech startups.  

In 2019, Cenhomes.vn is a real estate technology platform built on big data (Big data), artificial intelligence (AI) applications and many leading technologies such as Connect Peer to Peer, Matrix. Network, VR, 3D Scanning.

Citics, a Vietnamese proptech startup, raised US$1 million in a pre-series A round from a group of international and domestic investors in March 2021. 

Technology real estate platform Proptech OneHousing (belonging to One Mount Group) launched the first automatic home valuation tool in Vietnam, and the results are accepted by banks as a basis for determining loan limits. In 2022, One mount continues to produce 3 smart tools: Automated home valuation tools, Real estate project and market analysis tools, and Financial solutions for home buyers.

In March 2021, Homebase, the Vietnamese startup, received US125,000 from the US-based accelerator Y Combinator. Last December 2021, it mobilized an undisclosed sum in a pre-series A funding spherical led by VinaCapital, US venture capital company Pegasus, and Singapore’s 1982 Ventures.

In the end of 2021, Infina (formerly RealStake), as a digital investment platform where investors can invest with US$1,000, also closed a seed funding from the 500 Startups Vietnam venture capital fund and well-known angel investors. 

According to Crunchbase, as of June 2020, this Propzy has raised 33 million USD from 3 funding rounds. Once a bright star in the real estate industry, Propzy has officially announced the closure of operations starting from September 12 2022, according to Deal Street Asia.

Why is proptech thriving in Vietnam?

Explaining the growth of proptech even during the COVID-19 pandemic, Mr. Neil MacGregor pointed to two main reasons: Firstly, the great potential of Vietnam’s real estate market with a total population of more than over 97 million people as of 2021. The real estate market is still in its nascent stage with a lot of problems to solve. Proptech is capable of providing solutions to overcome these backlog problems. Second, Vietnamese people have a certain understanding of technology and have a good receptivity to new technologies. The proptech market is again tapping into this tech-savvy population, especially residents in apartment buildings, using property management apps.

Technological solutions can also help firms save expenses and increase profitability. According to experts, technology solutions boost performance in the real estate brokerage business while also saving buyers and sellers time and money. A ‘technology broker’ may service ten times as many clients as a typical broker.

Proptechs’ high potential explains why they may acquire investment commitments from investors even when the real estate market is stalled due to Covid-19 and many small enterprises have ceased operations.

Outlook for Proptech in Vietnam

According to experts, Vietnam has high potential for the development of Proptech. Mr. Neil MacGregor said the real estate market in Vietnam will continue to grow, especially in key cities such as Hanoi and Ho Chi Minh City and other “resort cities”. In the future, more capital will be invested in Proptech to serve this growing market.

The Vietnam Real Estate Association forecast that Vietnam’s property market would reach more than $1.23 trillion by 2030, accounting for 22 per cent of the economy’s total assets.

Proptech in Vietnam will continue to be pursued by investors in the coming years as a result of the booming growth potential and the currently developing proptech platforms. For foreign investors, the time is right to become an aspiring pioneer in the Vietnamese real estate market. 

If you still have doubts about the market as well as how to invest in proptech, reach out to Innolab Asia  immediately for the latest and most accurate information. 

Reference

VIR, V., 2022. Investors keen on Vietnamese proptech platforms. [online] Vietnam Investment Review – VIR. Available at: <https://vir.com.vn/investors-keen-on-vietnamese-proptech-platforms-96283.html> [Accessed 18 September 2022].

https://dangcongsan.vn. 2022. Xu hướng tăng trưởng lạc quan của ứng dụng công nghệ trong bất động sản (protech) tại Việt Nam. [online] Available at: <https://dangcongsan.vn/kinh-te-va-hoi-nhap/xu-huong-tang-truong-lac-quan-cua-ung-dung-cong-nghe-trong-bat-dong-san-protech-tai-viet-nam-578954.html> [Accessed 18 September 2022].

Yap, T., 2022. Tackling Issues With Tech: A Look Into the Vietnam Proptech Industry – Fintech Singapore. [online] Fintech Singapore. Available at: <https://fintechnews.sg/53171/proptech/proptech-vietnam/> [Accessed 18 September 2022].

News, V., 2022. Proptech set for strong growth in Vietnam. [online] VietNamNet News. Available at: <https://vietnamnet.vn/en/proptech-set-for-strong-growth-in-vietnam-748106.html> [Accessed 18 September 2022].

Yap, T., 2022. Tackling Issues With Tech: A Look Into the Vietnam Proptech Industry – Fintech Singapore. [online] Fintech Singapore. Available at: <https://fintechnews.sg/53171/proptech/proptech-vietnam/> [Accessed 18 September 2022].

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