VietNamNet Bridge – Technology startups have been trying to attract the investments from venture capital funds or sell stakes to foreign firms, because they need capital to develop.

“IDG or die” are the words Vietnamese technology startups whisper in each others’ ears.

IDG is the well-known investment fund in Vietnam which specializes in making investments in potential technology firms, and the words mean that Vietnamese firms wish to receive the investments from the funds like it to develop, or they would meet big difficulties.

In the first some months of 2013 alone, a lot of important deals in the “high technology community” took place.

Ngan luong’s deal makes both sides satisfactory

Ngan luong, a product of Peacesoft, is a big electronic payment portal with 10,000 service users, to which 3 network operators and 24 banks are connecting.

Peacesoft has sold 50 percent of Ngan luong’s stakes to MOL Access Portal Sdn Bhd, a big online payment firm with the headquarters in Malaysia. Its turnover in 2012 reportedly reached $300 million made from some 60 million transactions.

According to Nguyen Hoa Binh, CEO of Peacesoft, the decisions relating to Ngan luong’s operation would be made by Ganesh Kumar Bangah, MOL’s global CEO.

Binh declined to reveal the value of the deal, but said the value was high enough to deserve the Peacesoft’s efforts to develop the market over the last four years.

MOL also said it was satisfied with the affair which has completed the investment portfolio in South East Asia, where Vietnam is an important market.

Prior to that, some merger and acquisition (M&A) deals were reportedly wrapped up in the human resource service market. In February 2013, Vietnam Online Network which owns kiemviec.com, HRvietnam.com, sold Yume to MJ Group and then sold the whole company to CareerBuilder.

In April 2013, Navigos, which owns VietnamWorks and Navigos Search, sold 89.8 percent of stakes to En-Japan.

The Vietnamese online payment service market witnessed some other cooperation deals between Vietnamese and foreign partners. In late 2011, Japanese NTT Data bought 40 percent of stakes of VietUnion to obtain Payoo, the e-wallet service. Before joining hands with MOL, Ngan luong cooperated with Paypal.

Foreign investors buy Vietnamese firms’ potentials

Nguyen Van Tuan, a senior executive of VC Corp, noted that it would be quite normal for service developers to call for foreign investment to develop more strongly. However, he said, in many cases, firms are set up just with an aim to be sold later to foreign investors. In this case, the owners of the firms don’t develop their businesses wholeheartedly and only make low quality products.

Binh of Peacesoft said incapable firms would not catch the eyes of foreign investors, who can find out their problems easily. However, potential firms can have good opportunities to call for foreign investments, because many of them are eyeing the Vietnamese market.

The investors think that in order to cement their firm positions in the Vietnamese market, it would be better to buy the existing Vietnamese firms rather that starting the business from the very beginning. Therefore, they have bought stakes of some well-known firms, accepting to pay high prices for their long run business plans.

Nhan The Luan, CEO of NCT, the owner of nhaccuatui.com, also said that the investors consider the firms’ profits in the next 3-5 years, the value of the brand and the market before deciding whether to buy the firms and how much to pay.

Luan also said that Vietnamese technology remains young and the enterprises’ assets are not big. Therefore, foreign investors aim to buy the potentials of the firms rather than their existing assets.

NCDT