KVision, which deploys from a $450-million fund, has so far clocked three investments in Vietnam including online marketplace Sendo, new retail company Seedcom and business management software provider KiotViet.
“We are very bullish [about Vietnam]. Vietnam has a relatively good portfolio performance compared to other markets, even Indonesia,” KVision’s Vietnam country manager Giang Tran Minh Thanh told DealStreetAsia. He declined to disclose a specific capital commitment to Vietnam.
He elaborated that the market has better hurdle rates, declining country risk, and a qualified talent pool that is attracting other investors as well.
“We also hope to do at least three more deals [in Vietnam] in 2022,” he said, in addition to the two deals the fund is looking to seal this year.
KVision is focused on what it calls the AEC+3 markets that include Southeast Asia, Japan, South Korea and China.
The Thai bank investment division typically writes cheques from $500,000 to $5 million, with the flexibility to commit to higher amounts. While it has been co-investing with other funds, KVision also looks at acquisitions or sole investor positions.
“We see ourselves as a strategic partner to tech startups. We can hold investments for the long term where there is strong synergy with Kasikornbank Group,” Thanh said.
KVision is looking at edtech, health tech, SaaS, fintech and e-commerce related technologies in Vietnam. It will explore new verticals such as blockchain, going forward.
“Blockchain is one area we’re keen to seek opportunities. Sky Mavis’s success has proven Vietnam’s tech potential in the space. But what Vietnamese startups need to develop is a long-term vision to link the blockchain world to the real world,” Thanh added.
Kasikornbank set up KVision in 2018 as an investment holding company with an initial capital injection of 8 billion baht ($245 million). The firm makes both direct investments and funding in startups through Beacon Venture Capital, the parent bank’s Southeast Asia-focused fund established in 2017.
Prior to the deals in Vietnam, KVision – through Beacon – had invested in a number of regional tech companies, including Singapore fintech majors Nium and Aspire, and Thai startups BuilkOne and Ookbee.
Leveraging Kbank’s resources
As a corporate VC arm, KVision aims to leverage the network and strength of the parent company to its Vietnam portfolio.
Kbank is the second-biggest lender in Thailand by total assets, at 4 trillion baht ($122.7 billion). The lender, which officially opened its Vietnam branch earlier this month, has an overseas service network spanning 16 countries.
“There are a lot of products and services we can do together, such as merchant lending and buy-now-pay-later,” Thanh said.
KVision invested in Sendo’s $61-million Series C financing in 2019, before backing Seedcom and KiotViet in their latest funding rounds this year.
“The parent bank wants to better understand Vietnamese customers, and partnerships with companies like Sendo, Seedcom, or KiotViet can help merchants and SMEs access financial services much faster, especially during challenging times like the COVID-19,” Thanh said.
Vietnam has around 4.2 million micro and small businesses, who feel increased pressure to digitise their businesses in the aftermath of the pandemic. At the same time, they also lack access to capital, he added.
Per the SEA e-Conomy 2021 report by Google, Bain and Temasek, almost all local digital merchants are using online payment venues, while 72% of them have adopted digital lending solutions.
Seedcom and KiotViet have both announced they will develop digital financial services for Vietnamese merchants and consumers. While Seedcom operates retail brands such as The Coffee House, Juno, HNoss, and KingfoodMart, it also provides business management software through Haravan and iPOS. KiotViet’s suit of sale management solutions is used by over 150,000 business customers.
Meanwhile, Sendo will continue its strategy to focus on driving e-commerce in tier 2 and 3 cities in Vietnam.
“While online adoption in tier 2 and 3 towns is lower than larger cities, more than 70% of consumers are actually in these areas, and mobile phone penetration and Internet access are also growing rapidly,” Thanh asserted.
The SEA e-Conomy report also pointed out that non-metro areas in Vietnam represented a bigger portion (55%) of new online users in 2021.