Vietnam Investments Group (VI Group) is raising $150 million for its fourth fund after having fully deployed its $252 million third fund, VI Fund III.
VI Group’s managing partner David Do confirmed the development to DealStreetAsia.
The Vietnamese private equity (PE) firm is understood to have roped in both existing and new investors for the new fund. The first deals out of the fourth vehicle, VI Fund IV, are set to be announced in the next quarter, Do said.
The investment firm’s LPs mostly come from family offices, development institutions, sovereign wealth funds and insurance companies in the US, Asia and Europe, such as International Finance Corporation, Asia Development Bank and CDC Group.
VI Fund IV will allocate around 40% of its capital for tech investments – it plans to pump in the remaining amount in sectors such as education, healthcare and consumer services, manufacturing, transportation, tourism and hotels, quick-service restaurants, and affordable housing, among others.
In the tech space, it is currently scouting for opportunities in both B2C and B2B segments, said Do, highlighting how the changes in consumer behavior, which has been caused by the COVID-19 pandemic, is here to stay.
“There will also be changes in business infrastructure, for example, the use of QR codes, that need to occur as Vietnam’s economy moves to the next phase of development,” Do elaborated.
DealStreetAsia had earlier reported that VI Group is looking to cut smaller cheques ranging from $3-15 million for its tech investments. For Series A, it plans to pump in $3-5 million, while for Series B it is looking to invest $10-15 million.
In January this year, VI Group invested $15 million in AI-based English learning app ELSA along with international investor SIG as well as other backers.
The firm also invested in three other tech companies including Vietnamese “new retail” firm Seedcom, which owns Temasek-backed logistics company Scommerce and others; Teko, one of the members of GIC and SoftBank-backed VNLILFE Group; and Tap Tap, an app through which users can accumulate points for gifts.
In terms of exits, VI Group has cashed out profitably from Vietnamese e-payment major MoMo, and online recruitment portal Sieu Viet, which is backed by Singapore-based Affirma Capital.
Founded in 2006, VI Group focuses on high-growth businesses in Vietnam. In the tech space, the firm has so far invested in areas such as e-commerce, edtech, online recruitment, streaming and last-mile logistics. The firm typically picks up significant minority stakes in its portfolio companies with an investment tenure of five to seven years.
VI Group’s assets under management currently stands at $550 million so far – it has a total of 30 companies in its portfolio – this does not include the investments the firm is looking at from its fourth fund.
VI Group raised its third fund in 2017, the second in 2012 and the first in 2008.
VI Group joins a number of PE investors that are increasingly looking at the tech space in Vietnam. Global private equity powerhouse KKR has recently joined a $45 million Series B funding for SaaS startup KiotViet, while BDA Capital Partners has expressed that it had a meaningful allocation for tech-enabled businesses in the country.
Closer home, multi-asset manager VinaCapital set up its venture arm, VinaCapital Ventures in 2019 and has invested in GlobalCare, Homebase, GoStream, Logivan, Zone Startups Vietnam, Wee Digital, Urbox, FastGo, An Vui, Rever, Validus, Ecomobi and other indirect investments.