Vietnam-based Timo Bank has raised US$20 million in a fresh financing round led by Square Peg, a VC firm that has invested in unicorns such as Canva, FinAccel, and Airwallex.

Jungle Ventures, Granite Oak, Phoenix Holdings, and other angel investors also participated in the funding round, the company told Tech in Asia.

This is Timo’s first external funding round, and the proceeds will be used to develop the platform’s tech, with the focus being on products specifically for the Vietnam market.

Established in 2015, Timo offers digital banking products that facilitate essential payments and banking requests without requiring customers to visit a physical branch.

Consumers can even open a bank account without going to the bank for registration. The company said it also helps customers visualize their financial goals with a choice of fixed or flexible savings, with no hidden fees.

The company aims to acquire a digital banking license in Vietnam so it can operate as an independent digital bank.

“We are deeply committed to our mission of setting the benchmark for modern banking in Vietnam while bringing greater financial inclusion and accessibility to the large majority of the population which remains unbanked,” CEO Henry Nguyen said.

Timo’s latest capital raise comes amid a rise in the adoption of digital banking products in Southeast Asia, especially Vietnam. While a majority of Vietnamese consumers use a combination of digital banks and physical branches, the number of consumers using digital banks jumped 41% in 2021.