Editor’s note: This story has been updated to include details of the pre-Series C funding’s lead investors, based on Loship’s press statement.
Loship, Vietnam’s fast-growing one-hour-delivery e-commerce startup, has raised $12 million in a new funding round that brings the company’s valuation to over $100 million.
The funding is a part of the startup’s Series C round, its CEO & founder Nguyen Hoang Trung told DealStreetAsia in an interaction before the announcement. He, however, declined to comment on the total amount that Loship is planning to raise in the Series C stage.
In a press statement following the interaction, Loship said the pre-Series C round was co-led by Ant Group-backed venture capital firm BAce Capital, along with the investment unit of Sun Hung Kai & Co. Limited, an alternative investment company listed in Hong Kong.
Other investors participating in the round include MetaPlanet Holdings, a VC firm backed by Skype co-founder Jaan Tallinn; Saudi Arabia’s Wealth Well; Singapore-based Prism Ventures; and SQ Capital Group along with a plethora of individual investors.
Benny Chen, founder of BAce Capital, was roped into the new board of directors of Loship. Chen was on the board of Zomato and Paytm and has extensive experience in food delivery and fintech startups across China, India, and Southeast Asia.
“Loship creates a strong ecosystem which adds value to small businesses, customers and riders. Under Trung’s entrepreneurship and leadership, we saw the company get much stronger during pandemic by constantly bringing product and service innovation to its merchants and users. We strongly believe in local entrepreneurs to understand the market and people’s needs better in a great potential market like Vietnam,” said Chen in the statement.
BAce Capital invests in early-stage companies in emerging economies focusing on India and Southeast Asia. Meanwhile, co-lead investor Sun Hung Kai & Co invests across public markets, alternatives and real assets.
Loship is also in advanced talks with other investors for its Series C round, expected to be completed by the end of this year.
The development comes a few months after the startup raised a funding from Skype co-founder Jaan Tallinn, who participated through his investment vehicle MetaPlanet Holdings.
The transaction, sealed early this year, had marked MetaPlanet’s entry into Southeast Asia with the Vietnamese market.
Earlier, the delivery company had raised a bridge round of financing led by Singapore-based Vulpes Investment Management in 2020. Other investors including Saudi Arabia-based Daal Ventures, Wealth Well, Nigerian VC firm Eucagi Ventures, KI Group, and Moje Akhbari, who was the former managing director for Starbucks Greece and Cyprus, had joined the round.
Loship traces its roots back to Lozi, which is an app to deliver food, FMCG, electronics, fashion, cosmetics, laundry, medicine, courier, flower, ride-hailing, and B2B ingredients.
Founded in 2013, Lozi primarily targets Generation Z and millennial users – it launched Loship in late 2017. Prior to that, in 2015, it transformed into a social C2C e-commerce network.
Lozi had earlier closed its Series A and B rounds from several investors, including South Korea’s Smilegate Investment, Hana Financial Group, DTNI, Golden Gate Ventures, before announcing its Vulpes Investment Management-led bridge round in October 2020.
The round was joined by DAAL Ventures and Wealth Well (Saudi Arabia-based VC Firms), Eucagi Ventures (Nigerian VC Firm), KI Group, & Vice President of Starbucks.
As of November 2020, Loship had a fleet of over 70,000 drivers and 200,000 merchants, serving almost 20 lakh customers across four big cities of Hanoi, Ho Chi Minh City, Da Nang and Can Tho.
Food delivery is one of the main services of the company. Overall, Loship has targeted revenues of $31 million in 2020, according to a report in the Vietnamese newspaper TheLeader.
Some of the other prominent players operating in the country in the said market are GrabFood, GoFood, Now (a unit of Sea Group-backed Foody), and Beamin (backed by S Korean unicorn Woowa Brothers.
Vietnam’s food delivery market is projected to multiply three-fold from $148 million in 2018 to $459 million by 2023, according to a report launched by Kantar TNS last year.
Meanwhile, according to Statista, revenue from online food delivery in Vietnam stood at $302 million in 2020. By 2024, revenue in this segment is estimated to reach $557 million.
However, experts say that the market could witness a temporary blip going forward with the COVID-19 pandemic posing an adverse impact on ride-hailing and on-demand delivery service companies.
With the government imposing restrictions on passenger transportation and delivery services in key cities such as Hanoi and Ho Chi Minh City, firms are allowed to transport only essential goods such as food, medicines and medical equipment within a certain time frame.
Last year, food delivery startups — restaurant tech firms and cloud kitchens included — raised at least $2.75 billion from 17 deals, according to DealStreetAsia’s latest report Food Delivery Platforms: SE Asia’s Race to Deliver. This was a third of the total $8.6 billion raised by SE Asia’s startups in 2020.