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T hu Huong Le · 28 May 2021 · 9 min read

Why property tech is Vietnam’s next must-watch sector

Lately, Vietnamese proptech startups have been getting more love from investors.

In the three years since PropertyGuru had acquired Vietnam’s real estate listing portal
Batdongsan.com.vn, tech startups in the country have been popping up to disrupt an
opaque sector that is often associated with scams and fake listings.
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An apartm e nt c om ple x in Ho Chi Minh City / Photo c re dit: 123rf

Last year, full-stack real estate platform Propzy bagged US$25m in series A funding led by
SoftBank Ventures Asia and Gaw Capital. Rever, another tech-enabled brokerage, has
raised a total of US$6.3 million from both domestic and foreign VC firms. Homebase, a rent-
to-own startup based in Ho Chi Minh City, is backed by several notable investors that
include Y Combinator, 1982 Ventures, and 99.co founder Darius Cheung.

The country’s new generation of proptech startups want to tackle the low level of trust in
real estate transactions while capitalizing on a boom in demand in residential housing.

“In Vietnam, I believe we have just finished the phase of proptech 1.0, which is mainly
about online classified sites,” Duc Ngoc Luu, a proptech expert in Vietnam, tells Tech in Asia.
“The question you have to ask now is: What do consumers in the country need aside from
classified sites?”
Moving beyond listings
News and Muabannhadat.vn were once the country’s two giants in real estate
Batdongsan.com.vn CO RE

listing services.
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See also: PropertyGuru’s revenue and valuation fall for the first time in years

During its peak, Muabannhatdat.vn reportedly carried 85% of real estate listings in
Vietnam. However, it was shut down at the end of 2020 by its Switzerland-based parent
company Ringer AG, which cited that the Covid-19 pandemic had made it “impossible to
find a viable solution to continue the platform with economic success in the future.”

Top list-and-search real estate sites in Vietnam (by

tra ic)

Rank Name Monthly visits

1 batdongsan.com.vn 5.36 million

2 alonhadat.com.vn 1.86 million

3 sosanhnha.com 1.44 million

‹ 1 /2 ›

Unlike in the US, the Vietnamese market does not have a multiple listing system, which is a
centralized database of properties for sale established by both listing and selling brokers.

“One of the biggest pain points of the Vietnamese real estate market is the lack of
transparency,” says Vy Le, general partner of Do Ventures. “Buyers are confused by fake
listings commonly found on hundreds of websites that provide real estate brokerage
services.”

That’s what tech-enabled brokerage startup Rever aims to address.

Founded in 2016 by Manh Phan, a former head of marketing for popular messaging app
Zalo, ReverNews
took inspiration from the Tencent-backed Beike Zhaofang platform in China, CO RE

which is an offshoot of real estate brokerage company Lianjia (formerly known as

Homelink).
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Like Beike, Rever also wants to make property brokerage more transparent.

Manh Phan, founde r and CEO of Ho Chi Minh City-base d propte c h Reve r / Photo c re dit: Reve r

Besides having on-the-ground staff, the startup also leverages technology to verify property
listings. While list-and-search sites feature only asking prices, Rever’s platform also
captures data on the closing prices of properties, which can then improve pricing accuracy
in general, according to Phan.

Its system notifies both its agents and buyers/sellers on potential properties of interest,
based on matching criteria. The startup also operates offline centers in Ho Chi Minh City to
facilitate transactions.
This online-to-offline model has proven to work for Beike. Last August, the Chinese
Newsmore than US$2 billion after its IPO in the US. According to Bloomberg, it
platform raised CO RE

has about 226 million homes on its platform, 48 million monthly active users on mobile, and
about
P R E M I Uhalf
M a million
V I S U A L Sagents.
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Te c e nt inve ste d US $800 m illion in Be ike in 2019. / Photo c re dit: Te nc e nt

Not an easy feat

But Vietnam is nowhere near the scale of China, and disrupting a fragmented and still-
emerging real estate market is hard.

For tech-enabled brokers, “it’s a race to collect as much data as possible and how quickly
and cost effectively that data can be replenished,” says proptech expert Luu. “Condos and
houses get rented and resold constantly, and so any platform must deal with that ownership
and user churn to provide quality trusted data to the end customer.”

Phan from Rever explains that his startup needs to collect, aggregate, and analyze data on
and from three sources: properties, agents and customers.
In less matured markets such as Vietnam, customers often engage only in a couple of real
News during their lifetime, which means the buying cycle and timeline for a
estate transactions CO RE

potential home buyer can take years.

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While capturing customer data is a task for the long haul, leveraging data from agents can
be done more quickly, says Phan.

Rever employs about 300 full-time agents and works with thousands of contributing ones in
the city. The startup takes a 35% to 40% cut from the agents’ commissions, and it also
operates Rever Academy to train real estate agents and standardize its brokerage services.

“We still believe that successful sales require face-to-face interaction.”

In the future, Rever will open its platform to all active agents where they can access
verified inventory and, in return, help the company generate more data on real
transactions.

But will better data alone convince end-consumers to turn to proptech startups?

A 2017 research report by commercial real estate firm JLL and Tech in Asia noted that
proptech startups in opaque property markets face an “uphill battle” in overcoming
consumer preference for offline channels.

In Vietnam, even with a rising middle class and a 70% smartphone penetration, it’s not easy
to convince consumers to even use e-wallets, let alone rely on proptech companies for their
most important life purchase: their dream house.

“We’re a big fan of tech-enabled sales and marketing platforms, but we still believe that
successful sales require face-to-face interaction. And in Vietnam, that process is very paper-
driven and labor-intensive,” says Neil MacGregor, managing director of full-service real
estate agency Savills Vietnam.

Small discounts and subsidies might work to lure consumers to use Grab or Shopee, but
potential home buyers probably need greater incentives to turn to proptech apps.
Anh Le, a digital-savvy millennial office worker in Hanoi, had met with a dozen traditional
News
brokers offline and relied on her personal network to get information about residential CO RE

apartments. It took her several months before deciding to buy her current apartment in the
capital
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A vie w of the c apital Hanoi /Photo c re dit: Unsplash

Le says she still prefers traditional brokers who have “insider” information about housing
projects. She does not think tech-enabled brokers can bring additional value.

But there’s one lesson that proptech startups can pick up from Grab.

Since Vietnam does not have a licensing or certification process for real estate agents,
technically anyone can become one. This means scouting for the right agent is extremely
time-consuming. 

Luu, who used to serve as the chief operating officier for Softbank-backed Propzy, says
startups can implement a Grab-like rating system for agents.
This can help increase consumer trust and discourage agents from committing violations.
“If you payNews
attention to these types of governance mechanisms, then you’re going to createCO RE
transparency, trust, and efficiency in the system, and eventually win,” he adds.
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The proptech party is getting crowded

As demand for housing continues to rise in Vietnam despite the Covid-19 pandemic,
traditional players – those with stronger offline presence and, in most cases, have more
cash at their disposal – are not simply sitting on the sidelines.

Vingroup, Vietnam’s real estate giant, launched its OneHousing.vn platform and
OneHousing Pro Agent app last year. With its own development projects, such as Vinhomes,
and partnerships with major commercial banks, OneHousing already has a competitive
edge.

The One Housing offic e building in Hanoi / Photo c re dit: One Housing
OneHousing aims to become a one-stop-shop property platform that can offer multiple
services forNews
buyers, sellers, and investors. CO RE

InR EaMpress
P IUM statement
V I S U A L S to Tech
V I D in
E O Asia,
S OneHousing
N E W S L E T T E R Ssays its
C AT“mission
E G O R I E S is to build
M A Rthe most
KETS FREE NE

comprehensive ecosystem for living. Enabled by tech and data, our vision is to empower
people to live out their dreams starting with the place they call home.”

Other players have opted to build additional digital tools to serve their existing customers
better.

Savills Vietnam’s MacGregor says his company has rolled out its own property management
platform Property Cube for the more than 100 buildings under its management in Vietnam.
The platform facilitates ease of communication between tenants, developers, and
committees of building owners, and it also offers concierge services.

Despite rising competition, proptech startups that can either solve multiple problems in the
real estate sector or focus on niche angles such as fractional real estate investment can still
be quite attractive to investors, MacGregor adds.
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Im age c re dit: Tim m y Loe n / S ourc e : “ Clic ks and Mortar: The Growing Influe nc e of Propte c h” by JLL and Te c h in Asia, 2017.

Fractional ownership or investment, which means dividing an asset into smaller chunks for
owning or investing, is already popular in Western real estate markets. But in Vietnam, it’s
still a foreign concept.

“Vietnam is one of the most attractive real estate markets in the Asia-
Paci c region. ”

James Vuong, CEO and founder of personal investment app Infina, is hoping to change that.
He tells Tech in Asia that his startup’s business model is needed in Vietnam because the
News
country’s large and young population has “a deep conviction that real estate makes for theCO RE
best investment, yet prices are out of [their] reach and mortgage rates are too high.”
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Infina wants to make fractional ownership of different asset classes, such as market money,
certificate of deposits, mutual funds, and real estate, more accessible to everyone.

“In 18 to 36 months, when the gain is meaningful, the property will be sold and the profit
will be shared with all the co-owners,” Vuong explains Infina’s business model. “We charge
management fees and [take] a cut of the gain on the property.

Herston Elton Powers, managing partner at 1982 Ventures, believes Vietnam is one of the
most attractive real estate markets in the Asia-Pacific region.

1982 Ventures is an early investor in home financing platform Homebase, which co-invests
with home buyers until they can afford full ownership.
 News
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Phillip An (L) and JunYuan Tan (R), c o-founde rs of Hom e base / Photo c re dit: Hom e base

Powers says the Vietnamese home financing platform fills a gap in a market where “there
are still many who are underbanked that have not been fully served by the traditional
players.”

“Homebase has an extremely attractive business model and creates partnership

opportunities for traditional financial institutions and real estate companies to reach all
Vietnamese home buyers,” he adds.

According to Do Ventures’ Le, another potential model for proptech startups would be
providing a kind of digital escrow service that can reduce the risk of fraud in the closing
process of each real estate transaction.

The next Beike for Vietnam?

Across Asia, real estate companies are accelerating their investment in proptech to
complement their existing ecosystems.
A recent survey by Mingtiandi, a real estate intelligence and investment news site, suggests
News pandemic has sped up proptech adoption in the region. The respondents,
that the Covid-19 CO RE

who are real estate leaders, named big data analytics, artificial intelligence, and business
process
P R E M I U Mautomation
V I S U A L Sas theV Itop
D E Otrends
S Nfor
E W SAsia’s
L E T T E real
RS estate
C AT Eindustry
GO RIES in theMnext
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TS years.F R E E NE

On the investors’ side, in March, private equity firm Warburg Pincus reportedly started
raising a US$1.5 billion fund dedicated to real estate investments in Asia.

Though Covid-19 has delayed Rever’s Hanoi expansion plan, Phan remains optimistic about
the market potential.

The startup recorded a revenue of 100 billion Vietnamese dong (US$4.3 million) in 2019 and
is looking to close its series B soon, with DealStreetAsia reporting that the round could raise
up to US$10 million. Down the road, Rever also wants to build an ecosystem of tech-enabled
real estate and financial services.

“The market has a lot of room for growth,” Phan opines. “We need to wait for at least
another five years before determining who can win it.”

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TIA Writer
Thu Huong Le
“It's not a faith in technology. It's faith in people.” Email me at huong@techinasia.com

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