VNLife boss deems IPO ‘too complex’ for Vietnam-based firm

For years, Vietnam’s startup landscape has been touted as “the next Indonesia.” However, international IPOs for Vietnamese tech companies remain rare.

Niraan De Silva, CEO of fintech company VNLife, noted that going public in other markets can be “challenging” for Vietnamese firms. Speaking on the main stage at Tech in Asia’s Saigon Summit held Thursday, he said it would be difficult for local companies to move their capital bases abroad and attract enough attention from overseas investors.

VNLife CEO Niraan De Silva (right) at Tech in Asia’s Saigon Summit / Photo credit: Tech in Asia

Backed by well-known names such as SoftBank, PayPal, GIC, and General Atlantic, VNLife is one of Vietnam’s handful of unicorns. It runs VNPay QR, an interoperable cashless payment network that serves over 30 million users and over 400,000 merchants in Vietnam, as well as providing other digital solutions for banking, travel, and retail.

See also: Vietnam’s newest unicorn has been hiding in plain sight

VNLife has raised a total of US$550 million in disclosed capital, according to Tech in Asia data.

According to De Silva, the fintech unicorn has spoken to potential US backers, but “there is genuinely a lack of interest.”

The US market has “US$300 billion listed companies, and there are IPOs that are raising US$2 billion to US$3 billion,” the CEO pointed out. “A lot of them (US investors) don’t really care too much about an emerging Vietnamese technology company.”

When asked about the possibility of a domestic listing, De Silva said even that could still be “too complex” for VNLife.

He noted that regulatory hurdles make it “very difficult for a tech company” to go public. For example, Vietnam requires companies seeking to debut on the stock market to be profitable for at least two years and not be loss-making at the time of their listing.

This is coupled with a local investor base that prefers retail and real estate bets and may have limited experience with complex businesses.

“When you talk about technology, and explain that you’re investing for the next five years and there’s no profit right now for these products, that doesn’t work too well,” De Silva said.

VNG Corporation, another Vietnamese tech giant, withdrew its application for a listing in the US earlier this year and opted to “file a new registration statement in the future.”