Startup Shutdown: Vietnamese Proptech Startup Propzy Ceases Operations
When Vietnamese American entrepreneur John Le launched Propzy in 2016, his goals were clear: To standardize the real estate transaction process in Vietnam and provide optimal solutions to make real estate transactions safe and effective.
By combining a real estate marketplace on the front end with logistics, documentation, and transaction services on the back end, Propzy has created a strong value proposition for consumers and has established a clear competitive advantage in Vietnam.
The startup received more than $37 million worth of investments, the highest capital in Vietnam in the proptech sector. Propzy closed a $25-million Series A round led by Gaw Capital and SoftBank Ventures Asia in 2020 alone. Other investors include FEBE Ventures, Insignia Ventures Partners, and Next Billion Ventures.
But after six years in operation that allowed it to build a data warehouse of more than 50,000 apartments and residential complexes ready to trade and serve its customers, Propzy announced that it’s shutting down.
According to an internal email accessed by DealStreetAsia on Monday, Propzy's founder said the prolonged pandemic, global financial market instability, and the Russian war in Ukraine have contributed to his decision to close Propzy permanently.
“Our efforts to grow the business during this period resulted in absorbing significant losses that we were not able to recover from, given the continual lockdown in Vietnam,” reads Le’s email to his employees.
Propzy owns 30 transaction centers and a team of nearly 700 people in Ho Chi Minh City, according to its website.
“Our inability to raise funding amidst the backdrop of an uncertain global environment was the final jab of the knife in our young startup.”
In the last few months, hints of the startup’s financial troubles were already apparent. It dissolved its legal entity related to direct sales in Vietnam in June, which was said to be part of its business model restructuring.
DealStreetAsia also broke the news that Propzy laid off over 50% of its employees to scale down operations due to the pandemic.
As one of Vietnam’s most established tech-enabled property startups, Propzy was regarded as an “emerging giant” in a joint report by KPMG and HSBC in July this year. The report highlighted 10 Vietnamese startups that will have a lasting impact on the regional and global landscape over the next decade.
The startup was supposed to be in talks with Singapore’s 99 Group for an acquisition deal earlier this month. 99 Group is a leading real estate technology company that operates real estate portals across Southeast Asia. Founder Darius Cheung said that its interest in Propzy carried “a lot of uncertainties,” previously noting that a strong balance sheet will allow the firm to react to potential merger and acquisition opportunities, Tech in Asia reported.
Propzy has yet to officially and publicly announce its closure, but labor contracts with employees have already been terminated starting September 13. Le assured employees that they would receive full salary and severance pay.
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