Singapore-based private equity firm Northstar Group‘s latest bets in Vietnam include e-commerce major Tiki and coworking space provider UPGen.
Northstar managing director Bert Kwan confirmed the two investments, which have not been previously disclosed, but refused to divulge further details.
We had earlier reported that Northstar was seeking to lead a $75-million round for Tiki, which Kwan referred to as the Amazon of Vietnam. The round was later upsized to $100 million. We have reached out to Tiki for comment on Northstar’s investment disclosure.
We understand Northstar’s investment in co-working space provider UPGen, which was closed in November last year, was in the region of $15 million.
UPGen founder Nam Do declined to comment on the amount the startup raised from the PE firm in what he said was the company’s first institutional round of funding. The company recently bagged venture debt financing from Innoven Capital.
UPGen, formerly known as Up, currently operates workplaces in Hanoi and Ho Chi Minh City in Vietnam and plans to expand to Bangkok, Thailand and Kuala Lumpur, Malaysia this year.
The Northstar-UPGen deal is the latest in a series of early investments in Southeast Asia by PE firms, which typically like to back more mature startups and cut larger cheques. Other such deals include buyout major KKR backing a $10-million funding round for Thai e-commerce firm aCommerce and Kaizen PE’s $10-million financing for education startup YOLA in Vietnam.
Speaking at DealStreetAsia’s flagship Asia PE-VC Summit 2019 in Singapore this week, Kwan said opportunities in Vietnam and Indonesia outstrip the supply of capital.
“What we’re looking at, in many cases, is that we are making an investment into a business plan that is not fully funded. Not to say that it is venture [capital] territory, but we have to take the view that as our capital goes in, the return on capital is going to be high and the company will go on to raise additional capital,” Kwan said.
Northstar had invested $50 million in Vietnam’s education technology startup Topica Edtech last year.
Opportunities in co-working space market in Vietnam
Shared workplaces in Vietnam have grown on the back of the boom in the local startup ecosystem. In addition to local players such as Dreamplex, Toong (backed by Indochina Capital), CirCo (backed by East Ventures), COGO and others, foreign brands have also entered the market, including SoftBank-backed WeWork and Australian startup Kafnu.
However, funding for Vietnamese co-working space companies has been modest compared to the capital invested in regional peers. Singapore-based JustCo announced a joint $177-million investment with Singapore wealth fund GIC and Frasers Property last year, while Indonesia’s CoHive has to date raised around $37.2 million in funding.