Shinhan Future’s Lab VN: Growing with start-ups

VIETNAM is fast emerging as important destination, not only for manufacturers but also financial institutions that are eying overseas markets amid stagnant domestic growth.

Last year, 10 South Korean lenders that have a presence in Vietnam reaped $131 million in revenue. This was more than double the previous year’s $610 million, and also accounts for 13 per cent of their total overseas revenue.

Vietnam has become much more viable, according to industry watchers. With a population of 95.5 million and a passion to grow, the demand for financial services in Vietnam also have been on the rise, triggering the need for banks to enter the market.

One such bank is Shinhan, which has a big presence in Vietnam. In fact, it’s the largest foreign lender in the country by assets, raking in revenue of $81.8 million last year.

Noting the significance of the market, Shinhan also chose Vietnam as its first foreign branch for its start-up incubator Shinhan Future’s Lab in 2016.

“As a big financial group, we want to support start-ups. When they grow, they can help us and it becomes a virtuous circle,” Shinhan Future’s Lab Vietnam Deputy Director Kim Seon-il told the Investor in a recent interview.

“By supporting local start-ups that understand the local market well, we also learn about the market,” Kim added.

Shinhan Future’s Lab Vietnam, which incubates local-based startups only, has so far run two batches, having supported 11 start-ups ranging from fintech firms to health care companies.

It provides free office space in the heart of Ho Chi Minh City, along with mentorship programmes. Starting from the third batch later this year, it plans to invest in selected start-ups upon completion of the programme.

When choosing start-ups, the accelerator programme has no limits in terms of sectors but it takes into consideration what kind of expertise a financial institution can provide and whether or not it can create synergies.

For instance, Shinhan Bank’s Vietnamese branches are using UpUp App, which is part of Batch 2. UpUp App encourages employee engagement by combining gamification with real-time rewards.

“We’ve received a lot of practical help by providing services to Shinhan branches here and also grown fast thanks to that,” founder and CEO Paul Espinas told the Investor.

Espinas said the biggest advantage Shinhan Future’s Lab Vietnam provides is a global mindset.

“Working with a lot of founders in Vietnam, I realised it is easy to grow domestically, but having a global mindset to make your company notable is hard and it is rare to find an incubation programme that offers [a global mind],” Espinas added.

Kim said he is looking forward to fostering more start-ups in Vietnam where the start-up ecosystem is growing rapidly.

“Vietnamese entrepreneurs are fast to learn and with professional programmes that help them turn their ideas into real businesses, the Vietnamese start-up industry will grow explosively.”

Shinhan launched Future’s Lab in May 2015, the first start-up accelerator programme by a Korean financial institution. It has so far incubated 100 start-ups across sectors in South Korea.

In addition to the Vietnam unit, the accelerator programme is launching another regional programme in Indonesia this month.