Covid drives $33-mil property startup out of business

On Monday its CEO, John Le, confirmed the closure, pointing to the “prolonged pandemic compounded by global financial market instability from the Russian war in Ukraine.”

Its revenues had quadrupled from VND16.2 billion ($686,500) in 2017 to VND63.5 billion in 2019, while losses jumped 2.5 times to VND59.9 billion.

Its growth between 2017 and 2019 saw Gaw Capital Partners and SoftBank Ventures Asia invest $25 million in it in a Series A round in mid-2020.

But the pandemic hit the property market as well as Propzy’s business.

In 2020, its revenues nosedived by 90% to VND7.96 billion, and its losses jumped to VND120 billion. Things worsened the next year, with revenues of only VND970 million and losses of VND155.3 billion.

At the end of 2021, Propzy’s equity was a negative VND420 billion.

“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,” Propzy CEO John Le said.

Investments also dried up, with the 2020 Series A being its last recorded funding.

“Our inability to raise funding amidst the backdrop of an uncertain global environment was the final jab of the knife in our young startup,” he added.

Propzy will not be the last startup to shut down, and its failure signals the end of the era of “cheap money” during which interest rates were low.