Mio founder and CEO Trung Huynh
It was recently reported that the Vietnamese social commerce platform Mio, which raised US$9 million in funding from investors, including Jungle Ventures and Golden Gate Ventures, since its inception in 2020, has ceased operations.
As per the report, Mio, operated by ITaphoa Company, could not maintain its momentum after it pivoted to focus exclusively on the meat sector, leading to the shutdown.
According to Mio’s founder and CEO, Trung Huynh, while the meat market showed great potential and the startup observed early promising results in product-market fit (PMF) and traction in 2023, its unit economics still required substantial improvement.
“Given the company’s current business and financials and its internal evaluation of the capital market, Mio has decided to halt operations and distribute the remaining funds to its investors,” he said in a statement to e27.
In this interview, Huynh shares more insights into the rationale behind the shutdown and his future plans:
Edited excerpts:
Mio was a group-buying platform for groceries and fresh produce. In 2022, it pivoted to focus exclusively on the meat sector. Could you share more about the reasoning behind this decision?
We decided to pivot because we realised that scaling our broader social commerce model was becoming increasingly challenging due to high operational costs and intense competition.
By narrowing our focus to meat, we saw opportunities to leverage stable demand, improve our margins, and simplify logistics. This shift also allowed us to transition to a B2B model, creating more consistent supply chains and improving customer retention.
While you observed promising results in PMF and traction, you mentioned that unit economics needed substantial improvement. What were the primary challenges in optimising these economics, and how did they impact Mio’s growth trajectory?
Despite its size of over US$10 billion and stable demand, the meat market presents significant challenges. We’re caught between the strict quality requirements of our B2B customers in the HoReCa (hotels, restaurants, and catering) sector and the dominance of five to six large suppliers.
Without owning farms, we lack bargaining power, which limits margin improvements. Moreover, our reliance on these major suppliers means adapting to their product availability, operating hours, and logistics, giving us minimal flexibility to optimise operational costs and improve margins further.
You said in a statement that Mio had the capacity to continue operating for at least 1.5 years more. What led you to shut down now rather than use that time to improve the business model further or seek additional funding?
We realised that without owning farms or suppliers, we lacked the bargaining power and vertical integration necessary to optimise unit economics. Owning farms would have been essential to securing better margins and stable supply, but it required substantial capital and time investments.
While we improved internal operations through technology, the core challenge remained on the supply side. Given the scale of this issue, we decided against another pivot and chose to shut down instead.
You also emphasised the responsible return of funds to investors. How did you ensure investor confidence throughout the wind-down process, and what feedback have you received from them regarding this decision?
This was a difficult decision for the team, but we had 100 per cent agreement from the board and major shareholders, which helped maintain investor confidence.
Communication was vital—aside from board members and major shareholders, I offered every investor a one-on-one conversation to walk them through the decision and address concerns.
The decision was met with understanding and respect from other investors, who appreciated our transparency and honesty. Some even praised the brave decision and encouraged me to take a break and recharge, which I truly appreciated.
As a founder navigating Mio’s growth and closure, what are the biggest lessons you’ve learned from building and managing a startup, especially in a dynamic market like Vietnam?
Navigating both Mio’s growth and closure in Vietnam has taught me that the market holds immense potential for rapid success if executed well. Vietnam’s startup landscape is dynamic and highly receptive, and we scaled from inception to a Series A term sheet within just a year.
This experience underscored that having the right team, strategy, and speed is crucial, as the window for growth is often short, and timing matters significantly.
Another key takeaway is the value of relentless hustle in a country like Vietnam, where ambition and resourcefulness are essential for startups. I adopted the motto: “It’s better to do things you can’t explain than to explain things you cannot do,” inspired by Nassim Taleb.
The Mio team
This drove our team to operate quickly and creatively, making things happen even when the direction wasn’t always clear. Staying nimble and agile became our approach, helping us to address challenges and seize opportunities in a fast-paced environment.
Lastly, effective communication is critical, especially when working with international investors unfamiliar with Vietnam’s unique business landscape and its “grey areas.”
Since all 20 of our investors were based outside the country, maintaining clarity and transparency became paramount. I prioritised keeping them informed, even when strategies were complex or hard to explain.
Also Read: Mio raises US$1M to help rural Vietnamese women become micro-entrepreneurs
This transparency built trust and maintained investor confidence throughout both the growth and wind-down phases. It’s important not to expect every investor to grasp all nuances fully initially but to ensure they understand the intention and strategy behind each decision.
The news report linked Mio’s closure to a broader trend of tech startups facing challenges in Vietnam. In your view, what is the current landscape for startups in the region, and how does Mio’s situation differ from this general narrative?
While I’m not in a position to comment on others’ successes or failures, building a high-growth startup is extremely challenging everywhere, not just in Vietnam; the odds are stacked against you from day one. It’s like choosing the “death penalty” from the moment you commit to this path.
Mio’s closure, however, was a strategic decision, not a forced shutdown due to lack of funds.
We carefully evaluated the sustainability of our model, the practicality of continuing without significant investments, and the overall interests of our shareholders. Even though 1.5 years could have brought some incremental improvements, without a substantial capital infusion, it wouldn’t have been enough to make a significant impact.
So, instead of continuing with a model that wasn’t scalable in the long term, we chose to return the remaining funds to our investors while it still had meaningful value.
The closure was carefully managed to ensure a fair outcome for everyone involved, in this order:
- Paying all suppliers in full.
- Honouring all employee settlements and severance packages.
- Returning all remaining funds to our investors.
The process was conducted transparently and systematically, ensuring everyone’s interests were respected.
Despite Mio’s closure, do you still see potential in the social commerce model for Vietnam or similar markets? What factors do you think are necessary for such models to thrive in the future?
I like Jeff Bezos’s approach of focusing on ideas that won’t change over time, asking, “What’s not going to change in the next ten years?” In that sense, both the “social” and the “commerce” aspects of “social commerce” are here to stay for a very long time. Smart companies understand this.
The future potential will depend on which models are introduced and whether they fit the market’s evolving needs. Social commerce has taken many forms, and some companies are still successfully executing this model.
What are your plans post-Mio? Are there other sectors or opportunities you consider exploring in Vietnam or beyond?
It’s been an intense, nearly four-year journey, and now that I’m a dad with two kids, I’m planning to step away from the startup world for a while to spend more time with my family. I’m still open to exploring new opportunities in the future, but for now, my focus will be on my family. I might consider coming back at some point, but there isn’t a definite time frame for when that will be.
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