Vietnamese startup Lozi secures 8-digit funding from Smilegate Investment

Vietnam’s fast-growing tech startup, Lozi, which operates a consumer-to-consumer ecommerce portal and its own fleet for on-demand delivery service LoShip, said it has secured an eight-digit funding (in US dollars) led by South Korea’s Smilegate Investment, supporting its expansion across the country to become a one-stop solution for Vietnamese consumers’ one-hour delivery needs.

Photo credit: Stanisic Vladimir

Other investors participating in the round include DTNI, Ascendo Ventures (South Korea), JC Capital (US), and local accelerator Vietnam Silicon Valley, among others. DTNI also participated in an earlier round that Lozi closed in January this year.

Trung Nguyen, CEO and co-founder of Lozi, said the startup aims to become the fastest-growing intracity ecommerce platform in Vietnam, and the new funding will give a boost to its focus on one-hour delivery services.

Founded in 2013, Lozi was originally an app for people to find food, beverage, and coffee shops, primarily targeting Generation Z and millennial users. In 2015, it transformed into a social C2C ecommerce network. The company said it serves 2 million users.

In the same year, Lozi received its first investment from Vietnam Silicon Valley, and then later closed a seven-digit funding round with early-stage investor Golden Gate Ventures and Japanese-owned internet media company DesignOne Japan Inc.

Since 2018, Lozi has also offered one-hour delivery for multiple areas, such as hyperlocal C2C ecommerce, food delivery, grocery delivery, and on-demand laundry service. It is available in four Vietnamese cities: Hanoi, Ho Chi Minh City, Da Nang, and Can Tho.

As an intracity ecommerce platform, the startup aims to provide faster delivery to consumers by having its own on-demand drivers (called LoShip drivers) who make pickups directly from local merchants.

Kim Kyoung-Hwan, vice president of one of Smilegate Investment’s investment divisions, noted Lozi’s hybrid business model that combines ecommerce with on-demand delivery while operating its own logistics team. This eliminates the need for warehouses. “Lozi enables local retail offline sellers who have no proper ability to expand into online business to enjoy online-offline multibusiness,” he said.

With the fresh funds, Lozi now targets to triple the number of its daily transactions in the next 12 months, aiming for an annual revenue of US$31 million by 2020.

In all, the company aims to provide 20 services on its platform. Lozi is also planning to launch a new feature called Lo-xe to enter Vietnam’s competitive ride-hailing market.

Lozi must compete fiercely with regional giants Grab and Gojek (localized as GoViet) in Vietnam, though neither firm has rolled out comparable concierge services in the country. Other notable platforms that provide similar services is Now.vn, which is part of the Sea Group, as well as aspiring startup HeyU.

The investment in Lozi signals continued interest from South Korean investors in Vietnamese tech companies. According to Cento Ventures’ report on Vietnam’s tech investments, South Korean VCs took the throne among the most active investors in the first half of 2019, having participated in almost 30% of the deals in the country.

This report was first published on KrAsia.