Thanks to growing consumption power, a tech savvy population and good Internet infrastructure, Vietnam is now actively blipping on the radar of venture capital investors who are scouting for deals in Southeast Asia.
While Indonesia, the birth place of the “GTT” (Go-Jek, Tokopedia and Traveloka) unicorn batch, is often touted as an overheated market, the potential in the Vietnam ecosystem is still unlocked.
Investors assess this market also through the major events in the startup ecosystem that hogged the spotlight in 2017. In 2016, Vietnam saw the $28-million private equity deal in e-wallet MoMo by Standard Chartered Private Equity and Goldman Sachs as a significant event in the startup community.
DEALSTREETASIA has put together some top events that marked 2017, which saw its top startups grow bigger and tech giants tapping the market.
VNG signs MoU for Nasdaq IPO
VNG Corporation, Southeast Asia’s earliest unicorn, hogged headlines in May 2017 when it announced a memorandum of understanding with Nasdaq to list on the world’s second largest stock exchange. Le Hong Minh, chairman of VNG, told local media that the process to list could take up to two years from the date of the MoU. Still, it pictures the possibility that VNG will be the first Vietnamese company to have an overseas IPO, while low-cost carrier Vietjet is planning the same.
VNG’s look-alike peer, Singapore internet group Sea Limited, made a debut in October 2017 on the New York Stock Exchange, shortly after it rebranded from Garena, and was valued at $5.4 billion upon listing. The Vietnamese company has been silent on its valuation. It is widely known for messaging app Zalo, media platform Zing, and a strategic investment in e-commerce startup Tiki, in addition to the initial business of gaming.
Sea acquires Foody for $64M
DEALSTREETASIA in September 2017 broke the story of SEA Limited acquiring 82 per cent in Vietnam’s food media startup for $64 million. Sea was an existing investor in Foody, having funded the company in its series B round in 2015.
The two companies have neither confirmed nor denied the acquisition, but sources told this portal that the transaction value was $64 million, after Sea said in its NYSE listing prospectus that it had bought a controlling interest in an unnamed Vietnamese startup operating restaurant booking and food delivery services, in July 2017.
In addition, Foody also stated in an updated business registration certificate that Airview Investment Pte Ltd, a Singapore entity rumoured to be a Sea affiliate, was holding 82 per cent of its shares.
Foody allows users to list and explore restaurants and dining places across the country. It also provides the same service for the travel and beauty segments, while other business verticals include delivery, table booking and POS.
Jack Ma forays into e-payment
Alibaba’s billionaire founder Jack Ma sent the Vietnamese startup community into a frenzy in early November when the e-commerce tycoon came to the annual Vietnam E-Payment Forum. This visit, to Ma, was not simply about delivering another inspirational speech. He sealed a strategic alliance with the National Payment Corporation of Vietnam, more known as Napas, the sole intermediary payment service provider allowed to do financial switching and electronic clearing in the country.
Under the terms of the agreement, Ma’s e-payment arm Alipay will be enabled to provide services to Chinese tourists through Napas’ member banks and its intermediary payment service networks, according to media reports. After acquiring Lazada in a $1 billion deal last year, Ma’s empire now owns the biggest e-commerce website in Vietnam in terms of monthly traffic. Entering the payments market, Alibaba is rolling out its play to have a bigger slice of Vietnam’s $10 billion (by 2022) e-commerce industry.
JD.com rumoured to invest $44m in Tiki
The double-digit growth of the Vietnamese e-commerce sector looks too good to be just a pipeline market for Chinese players. Beijing-based e-commerce company JD.com was said to invest some VND1 trillion ($44 million) in Tiki, an e-commerce platform backed by VNG, according to a report on Vietnamese newswire Nhip Cau Dau Tu.
VNG funded the company with $17 million in exchange for a 38 per cent stake in 2016. DEALSTREETASIA earlier in 2017 reported from a source close to Tiki that the firm was raising a series D round in the range of $50-60 million. The source added that the deal was expected to close in the same year. DEALSTREETASIA had learnt that JD.com led this series D round.