Has IPO-bound unicorn Sea acquired controlling interest in Vietnam’s Foody?

The IPO-bound Southeast Asian unicorn Sea Limited has said, in its listing documents, that it has acquired a majority stake in an unnamed Vietnamese restaurant booking and food delivery services provider.

DEALSTREETASIA has learnt from sources that the target company could be gourmet media firm Foody Corporation.

“We intend to pursue strategic investment and acquisition opportunities in order to grow our user base, deepen our market penetration and further expand our offerings, including complementary services and products. For example, in July 2017, we completed our acquisition of a controlling interest in a company that offers an online platform for users to provide reviews of local businesses and provides restaurant booking and food delivery services mainly in Vietnam,” it said in the recent NYSE listing prospectus.

Sea, formerly known as Garena, was Foody’s series B backer in 2015. The Vietnamese food media company raised a series C round from US-based investment firm Tiger Global Management three weeks after the series B financing. Values of both rounds were undisclosed.

Foody’s CEO Minh Dang declined to comment when reached. An email sent to Sea has not elicited any comments.

Meanwhile, the Sea document said the acquisition helped strengthen the ecosystem of use cases for AirPay, the firm’s financial services platform. DeliveryNow, the food delivery business of Foody, is using AirPay offers, according to people familiar with the company. AirPay was launched in Vietnam in 2014.

While primarily operating in Vietnam, Foody, founded in 2012, has also set up its presence in Indonesia and is exploring Thailand market. In addition to restaurant review, the company owns a restaurant booking unit, a food delivery business and a POS system.

Last year, it invested in Hanoi-based flash deal startup Jamja.vn.

Meanwhile, all of the three pillars of Sea, which are entertainment platform Garena, AirPay and e-commerce business Shopee, have entered Vietnam.

“We believe our market penetration in Greater Southeast Asia is still relatively low, both in terms of the number of users and our share of discretionary consumer purchases, offering opportunities for growth. Due to the virtuous cycle dynamics in each of our businesses, we also believe that expanding our footprint across each of our platforms will further deepen our competitive moats to defend and grow our strong market position,” Sea said.

Greater Southeast Asia refers to the seven markets of Indonesia, Taiwan, Vietnam, Thailand, the Philippines, Malaysia and Singapore.

In this region, Sea takes companies with a presence in just one or a few markets as competitors, giving Vietnam’s VNG Corporation as an example.

VNG, invested by Sea’s Chinese long-term shareholder Tencent Holdings, in May signed a preliminary agreement to list on Nasdaq.

To take on the direct competitor, Sea had also filed for a Nasdaq listing but has ended up submitting for the New York Stock Exchange in a potential $1 billion IPO transaction.

In May 2017, the company raised a whopping $550 million series E round and re-branded to Sea Limited. The move came at a time when Sea looked for business diversification and expansion, while e-commerce competitors pocketed significant backing, such as Lazada getting acquired by Alibaba, Tokopedia invested by JD.com and Amazon also stepping up in the region.

Also read:

Southeast Asian e-commerce startup Sea Group to list on NYSE in potential $1b IPO

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Vietnam’s food service startup Foody raises Series B funding from Singapore’s Garena