Deutsche Bank has loaned $60 million to ride-hailer Be Group in Vietnam, where customers are literally fighting for rides as companies—including rivals Grab and Gojek—struggle to attract drivers amid COVID challenges and rising fuel prices.
Be Group said on Monday it will use the funds to expand three businesses—motorbike- and car-hailing, food delivery and digital banking—and has the option to borrow a further $40 million. The app maker said it looks to turn a profit this quarter, though startups overall have yet to prove a sustainable business model in the ride-hailing market.
Likewise, companies have not proven there is demand outside China for a superapp, something else Be Group is eyeing as it adds services like telecommunications and insurance.
The uphill battle for transportation grew even steeper over the past year, when COVID shutdowns pushed drivers out of the taxi and ride-hailing industries. They either surrendered their cars as a lack of customers made it impossible to repay vehicle loans, or fled to rural areas after Vietnam lifted lockdowns—or both. Then came Russia’s invasion of Ukraine, raising the cost of gas, which drivers typically pay for out of pocket.
“Despite the challenging competition landscape, I believe that Be Group is well inspired and supported to attain our medium and long-term ambition as a leading local tech company,” said Be CEO Vu Hoang Yen.
Her company partners with Vietnam’s VPBank to operate a digital bank called Cake, which offers loans to drivers and plans to add consumer loans with instant approval.
Unlike publicly listed Grab and Gojek, founded in Malaysia and Indonesia, respectively, Be Group remains a private startup. It has said it will not burn cash to win users “similar to some competitors.” Before the Deutsche Bank financing, the Vietnamese technology platform was funded mostly by its founders.
The company declined to answer Nikkei Asia’s question about who its domestic investors are.
Germany’s biggest lender said it is contributing to the Southeast Asian country’s “growth story.”
“As Vietnam’s economy continues to thrive, we see many opportunities to partner with our clients to support their growth,” said Sreenivasan Iyer, Deutsche Bank Southeast Asia head of investment banking coverage.