Lots of investments in Vietnam

Not sure why right now, but over the past week there have been a lot of investments in Vietnamese companies and startups by foreign investors. KKR’s investment in VHM is the biggest at $600m, but there are a number of multimillion dollar investments in small start ups.

These startups are in big markets: property, entertainment and consumer finance (with some in multiple areas). Ultimately, the funds that have money that they must put to use, and it really seems like Vietnam is an attractive market, despite COVID and the weak performance of the public stock market over the past few years.

Quick summary of the deals that caught my eye:

VHM: The big announcement is a 6% stake in Vinhomes by KKR. This is especially timely given my recent post on value at VHM. Total cost was $650m, so not shabby for the Vietnamese market. VIC will continue to be the majority shareholder. Remember that it owned 56.86%, so it is now just above 50%, I assume.

I don’t really understand why KKR is buying into publicly-listed companies, although it did a similar transaction with MSN, which turned about $100m in 2017 into more than $200m last year (according to this article - I didn’t check the numbers).

I would think, though, that KKR would get even better returns by buying up a bunch of companies with good land banks, rolling them up and then selling/listing the combined company. That’s a more traditional private equity route. Although it is much more time-consuming and risky.

Propzy: The proptech company closed a $25m Series A led by Gaw Capital and SoftBank Ventures Asia. Propzy helps guide people through the real estate process. The money will be used for expansion and to provide a balance sheet for direct mortgage financing.

The company says it has handled more than $1bn in transactions since it was founded. No wonder they were able to raise so much.

Source: Company data

F88: Also in the fintech space, F88 rasied $6m on a valuation of $91m in a follow-on investment from Mekong Capital and Granite Oak. F88 is a consumer lending firm with 180 storefronts now. It had only 11 branches at the time of the first investment in 2016. It’s last round was in 2018 when it was valued at less than half ($43m).

Beta Media: In a slightly larger deal, Daiwi PI Partners invested $8m in Beta at a valuation of VND1tr ($43m). This is the third investment round in the firm. The first was VIC, the second was a $2.5m investment by Blue HK Financial Group. The last round had a valuation of VND600bn ($26m), so this is a nice step up.

Beta Media is a budget cinema operator, and it shows how far Vietnam has come conquering COVID, because nowhere else in the world would someone investment in movie theaters. AMC Theatres, the largest movie theater chain in the US, warned that it could go bankrupt.

Ultimately, though, Beta is a bet that Vietnamese consumers will start to move up the chain from essentials to more and more entertainment. Of course, I was also interested in the launch of VieON, a new streaming service. It will be interesting to see if Vietnam moves straight to streaming and skips the cinema route at all. I hope not, because there is nothing like watching a movie with a raucous crowd while eating popcorn and drinking a coke. I love it! I miss it!