VinaCapital Ventures bets on logistics, fintech and digital media

Don Lam, founding partner at VinaCapital.

While investors are betting heavily on the consumer internet or healthcare sectors, Vietnam-based asset management firm VinaCapital believes that the opportunities in logistics are enormous and could spawn the next Vietnamese unicorn.

“We believe the opportunities in logistics are enormous – which is why our first two investments (LOGIVAN and FastGo) were in the sector. The costs of logistics are among the highest in the region, if not the highest, and startups that aim to change that should do well,” according to VinaCapital founding partner and CEO Don Lam.

VinaCapital also believes that the fintech sector offered a lot of potential given relatively low levels of penetration of banking in Vietnam. Vietnamese banks tend to be very traditional and slow-moving when it comes to tech, so the segment is ripe for disruption and innovation, Lam opined.

“Finally, digital media/entertainment could [also] spawn the next unicorn as the sector is thriving among Vietnam’s digitally native and increasingly affluent youth,” he told DEALSTREETASIA on the sidelines of Singapore Fintech Festival 2018.

Vietnam produced its first unicorn startup in 2016 when internet company VNG Corporation hit the $1-billion valuation.

According to a recent report by Bain & Co, the south-east Asian region is entering a new growth phase which could see it produce at least 10 new unicorns by 2024. In addition, Indonesia and Vietnam are voted as the hottest markets in Southeast Asia outside Singapore.

In a move to boost the local startup ecosystem, VinaCapital had, in August, launched a $100-million tech-focused venture capital fund – VinaCapital Ventures – to invest $2 million to $10 million into each startup, with an unlimited holding time.

The reason that the fund is taking a non-traditional path where it has no lifespan, is that VinaCapital realises that some things take time to realise their potential, added Lam.

Although $100 million is a sizeable corpus, Lam is optimistic that deal flow in the Vietnamese market is capable to support the capital. The fund will focus on investing in Vietnamese companies with proven revenue streams, especially those with concepts that can be scaled up to a regional or global level.

It will also form joint ventures and partnerships when appropriate, said Lam.

“VinaCapital Ventures launched just four months ago, and we already have announced two investments, and have signed term sheets for three others, with several more currently being evaluated. There is a lot of deal flow in the market, a clear sign of how active this space now is. Also, to provide some perspective, when we launched our DFJV fund back in 2007, the average investment was less than $1 million; today, the average investments are $3-5 million, and we’re likely to see some that are more than $20 million,” he said.

VinaCapital is one of the earliest VCs in Vietnam investing through its first VC fund, DFJV, which was part of the Draper Fisher Jurvetson (DFJ) network. The firm is currently divesting the assets from the fund.

“DFJV has divested some assets in full and others partially. The remaining assets should be fully divested in the next 12 months. The investors are very happy with the fund’s performance to date in terms of the cash returned and the value of the remaining assets held,” said Lam.

Founded in 2003, VinaCapital currently has $1.8 billion in AUM, with assets across capital markets, private equity, real estate, venture capital and fixed income.

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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.