Even as it continues to raise funds for its Series E round, Vietnam’s homegrown e-commerce giant Tiki is separately mulling tapping the public markets overseas for additional capital, sources familiar with the matter told DealStreetAsia.
“Several US SPACs have approached the company. But the focus [for the company] is still on finishing its Series E round and growing the Vietnam business,” said one of the persons mentioned above.
Early last month, DealStreetAsia had reported that Tiki has made the first close of its Series E round at around $100 million, while the total corpus that it is targeting to raise stands at over $200 million.
The development comes two months after Tiki set up a holding company in Singapore in May by the name of Tiki Global Pte Ltd.
Tiki’s legal advisor LNT Partners, on July 28, had said on its website that it has assisted the company in an “unconditional merger clearance for its sale of a controlling interest to Tiki Global Pte Ltd,” with the aim to prepare for a future overseas IPO.
“The transaction is expected to bolster Tiki’s competitiveness on the rapidly growing e-commerce market and play a strategic role in the entity’s overseas IPO and regional expansion plans,” LNT Partners had stated.
Prior to that, on July 16, Vietnam’s competition watchdog VCCA had announced that Tiki will transfer a 90.5% interest to Singapore-incorporated Tiki Global Pte Ltd and that the deal will not violate Vietnam’s antitrust law.
When contacted, Tiki declined to comment on the development.
It is common practice for Vietnamese companies to register their businesses in Singapore for fundraising purposes.
Examples include Lozi Singapore and Ficus Asia Investment that have, so far, raised over $6.3 million and $75 million, respectively, show ACRA filings seen by DealStreetAsia – DATA VANTAGE. While Lozi Singapore’s group companies are e-commerce platforms Lozi.vn and Loship in Vietnam, Ficus Asia Investment has investments in Vietnam-based new retail group Seedcom.
Setting up a business in Singapore can help a company “benefit from Singapore’s lower capital gains tax, easier share transfer procedures, and more enjoyable regulations on foreign ownership limit,” said a Vietnam-based M&A lawyer on condition of anonymity.
Capital gains tax in Vietnam stands at 20%, while Singapore does not impose a tax on the sale of shares and financial instruments.
Tiki was most recently valued at around $600 million prior to the Series E funding round, a source had earlier told us, citing the company’s fundraising plans. It had also raised $43 million from the sale of corporate bonds between March and June. Currently, Tiki is looking to close its Series E round at a valuation of around $800 million.
Tiki, which is understood to have raised nearly $300 million in total funding so far, had earlier secured about $190 million from a host of investors.
Apart from Tiki’s CEO Tran Thai Son, who currently holds 11.87% stake in the company, its existing backers are Vietnamese unicorn VNG; Chinese retailer JD.com; Japan’s CyberAgent Capital; South Korea’s STIC, Korea Investment Partners; and Singapore’s EDBI and Ubiquitous Trader Pte Ltd.
Companies in Southeast Asia are increasingly warming up to the idea of merging with SPACs as they carve out their overseas listing plans. Those in the fray currently are ride-hailing giant Grab, online realty company PropertyGuru and digital credit platform Kredivo.
Before the SPAC frenzy gained pace in Southeast Asia, Sea Limited had launched its IPO on the New York Stock Exchange in 2017.
“The imminent task for Vietnam’s Tiki now is to become a local champion in e-commerce and adjacent services before the IPO,” said a source mentioned above. In Vietnam, Tiki’s prominent rivals are Sea Limited’s Shopee and Alibaba-backed Lazada.