Vietnam’s Citigo Software-owned software-as-a-service (SaaS) company, KiotViet has raised US$6 million in a Series A funding round from venture capital firm Jungle Ventures, and an online travel aggregator Traveloka. The startup, which provides companies with cloud-based store management software, plans to utilise the funds towards expanding its offering across Vietnam, especially for small and medium-sized businesses.

“KiotViet will open offices in all provinces and cities in Vietnam to serve customers in remote areas who have low technology knowledge and accessibility,” deputy general director of Citigo, Tri Cao, said in an email correspondence.

According to Cao, KiotViet will also utilise the proceeds towards improving the leadership capacity of the management team and recruit talents, along with improving product and service qualities.

Citing recent studies on SME market of Vietnam , Cao said that Vietnam’s SME sector comprises up of 95 per cent of all enterprises, contributing around 40 per cent to GDP, and employs around half of the total workforce. “However, SMEs continue to face hurdles towards digitalising their operations. Our aim is to provide such companies with innovative and intuitive digital solutions to help them digitalize, increase efficiency, and tap into new opportunities,” Cao added.

The startup drives its monetisation by collecting a monthly fee from the SMEs, starting from VND 160,000 (USD$ 7); and 240,000 VND from private enterprises. Although the company did not reveal its revenue details, it claims to have experienced a growth rate of 250 per cent year-over-year. It currently employs 850 people, and expects to take the headcount to 1,200 by the year end. The company says it is looking to recruit high quality programmers from top-notch local and international universities of technology.

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To the question if Kiotviet is getting any other form of support from investors, Cao said that Jungle and Traveloka have connected the startup with many partners to forge new collaboration opportunities.

“With even the traditional retail sector adopting more digital transactions, we see that KiotViet’s products and services will be a definite game changer. The company is therefore well-positioned to help Vietnam’s smaller merchants close their digital gaps and enable more sustainable growth in the years ahead,” company’s statement cited Jungle Ventures’ principal, Grace Yun Xia, as saying.

As part of the deal, the AVP of Traveloka investment will be joining KiotViet as board of directors, the company said.

The April 2019 report by ResearchAndMarkets indicates that Vietnam’s cloud service market is poised to grow to $291 million by 2024, up from $165 million in 2018, at a CAGR of over 10 per cent year-on-year. The same report suggests the growth will be primarily led by SaaS companies and SMEs, due to flexibility in adoption, cost-efficient, and easy to set up that does not require installing any hardware or software.

According to ResearchAndMarkets, northern Vietnam is the leading region in the Vietnamese cloud service market owing to the presence of large corporates and private organisations, government and defense institutions coupled with the growing number of SMEs in the region.