The coworking space market continues to be exposed to increasing risks from the pandemic. VIR’s Bich Ngoc talked with Duong Do, CEO and founder of Toong, on how investment capital is being used most effectively in its business at this challenging time.
How has the pandemic affected Toong’s operations as committed with fund provider Indochina Capital?
|Duong Do, CEO and founder of Toong |
Indochina Capital invested in Toong when it was already a long way into its existence, not from the beginning. The investment capital at that time from Indochina Capital was not too much, and it was just enough for Toong to expand by another one or two locations since that time.
All things that Toong have developed until now is based on the rotation of our business results. Moreover, during the past few years, we have not received any new capital from investors.
I am pretty proud of it because it proves the business efficiency of Toong as a startup business. There are very few startups, even worldwide, that can raise themselves and develop after receiving the first rounds of capital.
My mindset is that I must be able to live and develop by myself, and then I can prove our efficiency to investors. If you only live on capital disbursed from other investors, it is an unsustainable business and cannot be called an actual business.
What does it mean to Toong to be able to access such capital from investors?
I am very fortunate and grateful to receive the trust and support from Indochina Capital and other investors who have accompanied us throughout the development of Toong until today.
The most precious thing is that they have been with me since the days when Toong’s business was not yet effective. They trusted us and they poured the money in and, more importantly, they let Toong’s team think and execute its investment strategy in the way that we thought was right.
They did not interfere with our business matters, but they supported us with the skills we lacked. In particular the support from Peter Ryder, founder of Indochina Capital, has been essential and meaningful. Thanks to the support from investors, within two and a half years since its establishment, Toong has started to make profits in every location of its system.
So far, we have grown many times over, but I still haven’t raised new capital from investors. The point here is not meaning that we can’t call on it, but we must improve the current business performance first. When the business situation is on a sound footing, we would have many advantages on the negotiating table for any deals that we want.
When and how do you plan to raise further capital?
Maybe next year, when the pandemic situation is better controlled, it will be the time for me to think about looking for new sources of capital. However, this future capital source will be used to expand new locations and not upgrade the existing ones.
Going through a pandemic, investors and markets will have the best judgment on the effectiveness of businesses. The ones who do not have the actual effectiveness will disappear. The pandemic for me, on the one hand, is extremely harsh with countless challenges to overcome, but on the other hand, it is also really interesting. It will be a filter to define incapable businesses and push other companies to find solutions to survive.
During its business, does Toong take into account investors’ opinions?
I must say that I have been very fortunate with the investors, who always give me the right and confidence to make my own decisions.
They have absolute trust and patience with Toong, because in addition to pouring in the capital, they also give Toong enough time to execute its plans.
Because it will be difficult when we have a new business plan and we have to prove its effectiveness first – we cannot do anything if we have conflicted opinions.