Traditional employers of blue-collarworkers such as retailers, hospitality, and manufacturers (especially intextile, garment, shoes) have seen their recruiting costs gone up whileemployee retention rates have trended down in the past few years, puttingpressure on both P&L and organizational stability for growth. Many workersalso move to the gig economy jobs for daily pay with a more flexible schedule.
True costs of turnover have also beenunderestimated. A 2018 study by Harvard University1 benchmarks the “real” cost of losing anemployee – from recruiting, onboarding, training, and productivity lost –equals 16-20% of annual salary. If a factory is losing a worker with a VND 8million monthly salary, that factory will likely incur an implied loss of VND18-20 million in turnover costs.
Moving to flexible pay similar to thegig economy, while attractive to worker retention, remains a challenge foremployers due to technology and administrative burden, and cash flow issues. Atthe same time, a majority of Vietnamese workers are living from paycheck topaycheck and any sudden expenses could put them in financial distress, makingtens of millions vulnerable to debt traps of micro loans with 300-500%/yearinterest rates to make ends meet.
To build a service to plugin that gapfor employers and employees alike, Nano Technologies, the first homegrown Vietnamese startup selected by the USaccelerator Y Combinator, announced it has closed its oversubscribed US$3M seedround. Alongside previous pre-seed co-lead investors Golden Gate Ventures andVenturra Discovery, the Vietnamese start-up welcomed a strong consortium ofregional and global investors into its Seed Round, including FEBE Ventures,Openspace Ventures, and U.S.-based Goodwater Capital.
Founded in early 2020 by Dzung Dang(ex-Uber GM and ZaloPay CEO) and Thang Nguyen (CTO Focal Labs and SeeSpace),Nano aims to support employers to keep their workers better and morecost-effectively while helping employees stay out of debts. By partnering withcaring employers through a flexible payroll app called VUI, Nano empowerslow-income workers to access their earned salary anytime, anywhere to take careof daily expenses without having to wait until the next payday. VUI app alsohelps workers keep track of work attendance, receive the most importantannouncements from the company, and learn basic concepts in personal financialmanagement – all for free.