Vietnam Dealbook: New $1.3m startup fund launched; VinaCapital exits 21st Century

Following a spate of initiatives to support local early-stage startups, the southern Ho Chi Minh City has launched a $1.3 million fund to make investments in small tech companies. Meanwhile, VinaCapital has divested its entire stake at 21st Century International Development JSC, a local real estate firm.

Ho Chi Minh City launches $1.3m startup investment fund

A VND30 billion ($1.3 million) early-stage investment fund, named the Ho Chi Minh City Startup and Innovation Fund, was launched on Tuesday, local media reported.

The fund, founded by state-owned Ho Chi Minh City Finance and Investment Company and Saigon – Hanoi Commercial Joint Stock Bank (SHB), will increase its size to VND100 billion ($4.48 million) by 2020 by raising from local corporations.

In principle, there will be no restriction for an investment. The deal value will depend on the fund’s own capital as well as the evaluation of the management board.

The fund is mandated to support young startups, preferably mobile and web-based applications, and tech-based agriculture solution providers, said Truong Ly Hoang Phi, director of the Business Startup Support Centre in the city – the fund’s operator.

Geographically, the new initiative will also look at startup companies outside of Ho Chi Minh City, even as its goal is to contribute to building the southern city into a “destination for startups”, she added.

Vietnam has seen several partnerships that involved private companies to nurture the growth of local young startups. Previously in January 2016, the central Da Nang City had also launched the $1.3 million incubation programme – a cooperation between the city’s development fund (which contributed VND20 billion) and local investors. Other programmes include an accelerator formed by tech major FPT and Dragon Capital, and incubation hubs that Lotus Impact teamed up with the Foreign Trade University in Hanoi and the University of Da Nang.

Also read:

Must empower youth to create innovation: Lotus Fund MD

FPT, Dragon Capital team up to launch Vietnam startup accelerator

Da Nang launches $1.3m incubator

VinaCapital funds exit 21st Century, earn proceeds of $104.1m

VinaCapital’s funds, VinaLand Limited and Vietnam Opportunity Fund Limited (VOF), have announced that they are making a full exit from Vietnamese real estate firm 21st Century International Development JSC.

The divestment includes the funds’ entire stake in the developer’s 301,000 square metre mixed use project in Ho Chi Minh City that the asset management company acquired in 2006.

21st Century was an affiliate company of VinaLand, while VOF had direct holding in the mixed use development.

“Significant work was undertaken during this period in relation to master planning, re-structuring and approvals and due to the large size of the project coupled with the requirement for the company to contribute additional capital and debt upon commencing the development, the project was divested,” VinaCapital said in a filing.

The buyer is Khai Hung Real Estate Co Ltd. This transaction will result in net cash proceeds of $75.4 million to VinaLand and $28.7 million to VOF, the funds said.

“The closure of this transaction which is the largest project in the portfolio is consistent with the company’s strategy agreed at the extraordinary meeting in November 2015, where shareholders supported an extension of up to 12 months to continue with the strategy focused on the realisation of assets,” said David Blackhall, managing director of VinaLand.

“With the closure of this divestment, VOF’s exposure to direct real estate falls to less than 10 per cent of total net asset value. This is a significant milestone in the company’s ongoing strategy to reduce direct real estate holdings, and enables VOF to remain opportunistic in areas of the market where we see significant upside, namely privately negotiated deals and OTC investments,” added Andy Ho, the director of VOF.

This fund will continue to track the robust deal flow in these asset classes, after making some latest investments in the Airports Corporation of Vietnam and Thai Hoa Hospital. “We are evaluating a number of very attractive opportunities in the pipeline,” said Ho.

VOF’s fully realised private equity investments have delivered an IRR in excess of 20 per cent to date, while Ho believes these types of investments continue to offer the most attractive returns in the market.

Also read: 

Vietnam: VinaCapital to focus on PE investment, reduces real estate holdings

VinaCapital invests $9m in Thai Hoa Hospital

Vietnam Property Holding exits Century 21 over delisting dispute

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.