Right place, wrong time: VN skips SEA’s IPO joyride

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Timing is everything, not only in business, but also in life, love, career, and finance. Yet, the stars very rarely align for things to perfectly fall in place. Hence, the birth of AI, machine learning, data science, and any tool or field of study that can help us crack the code of the magic crystal ball. The best we’ve currently got is bite-sized insights of the future, based on predictive behavioral patterns.

While a number of tech firms in Southeast Asia are either making their debut on public markets or well on their way toward an IPO, Vietnam’s startups are nowhere to be found. As you may have already guessed, timing has a thing or two to do with it. The country’s startup ecosystem is at a nascent stage compared to those in some of its Southeast Asian neighbors.

Therefore, the dash toward the IPO goldmine for Southeast Asia’s startups just came a bit too early for Vietnam. It’s not a case of playing catch up for Vietnam’s startups – rather, it’s a case of arriving late.

Today we look at,

• Why no VN startup showed up to SEA’s IPO party
• The startup known as the “Bloomberg for digital assets”
• Other newsy highlights such as lucrative funding for Singaporean and Indian startups as well as Byju’s closing in on US listing

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There’s no need to hurry

Image credit: Timmy Loen

This may shock you, but an IPO is not always the endgame for startups. No one is rushing to cash a smaller check (I know, so 2000s, right?). The time may not be ripe for Vietnam’s IPO hopefuls to jump into the stock market, but their founders are unlikely to be losing any sleep over it.

Vietnam’s startups are bursting with potential and are privately well funded, with the total deal value in the country skyrocketing to US$1.3 billion in the first half of this year.

• More ways than one: In a report titled “SEA Exit Landscape 2.0,” Golden Gate Ventures, which has focused on Vietnam since the mid-2010s, forecasted a total of 468 exits between 2020 and 2022 for the whole region. About 80% of these exits will be driven by mergers and acquisitions, 15% by secondary sales, and only about 5% by IPOs.

• Not blessed with abundance: Vietnam doesn’t have a lot of high-value tech startups for now, with the list only consisting of three unicorns – VNG, VNLife, and Sky Mavis – and two soonicorns in Tiki and MoMo. Among these tech stars, Sky Mavis – developer of the globally popular blockchain game Axie Infinity – is an exception. The startup is technically considered a Vietnamese unicorn, though it is not incorporated in the country.

• A loophole: Regulations are a big factor in the race to go public, even for major corporations. For example, foreign shareholders are barred from owning more than 50% of a company in certain sectors in Vietnam. The listed entity must be approved by the State Securities Commission (SSC), even for an offshore listing. The SSC requirement, however, can be circumvented if a non-Vietnamese entity is listed.

Bloomberg, is that you?