|US-based Society Pass (SoPa) announced its acquisition of Leflair LLC from a company in Hong Kong to revive the brand in Vietnam in the third quarter. Source: baodautu.vn |
Last week, US-based Society Pass (SoPa) announced its acquisition of Leflair LLC from a company in Hong Kong to revive the brand in Vietnam in the third quarter. The deal could help SoPa venture into the country’s lucrative high-end consumer segment.
SoPa is an e-commerce startup connecting consumers with suppliers in Southeast and South Asia. In Vietnam, SoPa runs its e-commerce platform for food and beverages, and is a supplier of point-of-sale and marketing solutions connected with users’ data management.
Founded in 2015, Leflair provided luxury fashion brands and beauty products at steep discounts. Since its launch, Leflair has raised millions of US dollars from angel investors and venture capital funds from the United States, France, Italy, Singapore, Hong Kong, South Korea, and Cambodia. However, in February 2020 Leflair suspended its local operations, blaming “changes in the investment landscape for startups” that caused operational inefficiencies.
The revival of Leflair is a testament to the attractiveness of Vietnam’s high-end fashion market to US investors. Vietnam could have up to 50 ultra-high-net-worth individuals with a net worth of at least $30 million each and over 25,000 high-net-worth individuals with assets of at least $1 million each by 2025, according to the 2021 Wealth Report by Knight Frank.
US private equity giant KKR has also placed bets on the Vietnamese market by injecting capital into EQuest Education Group, a leading educational services provider, and Vinhomes, the country’s largest real estate developer. Since 2011, KKR has invested more than $1 billion of equity in leading Vietnamese businesses including Masan MEATLife and Masan Consumer, Vietnam’s largest local-branded packaged food company and a subsidiary of Masan Group.
Venture capital fund Goodwater Capital and others invested $100 million in a series D round in e-wallet app MoMo in January. Goodwater Capital also joined a $3-million seed funding round in Vietnamese on-demand payroll startup Nano Technologies in May.
Eric Kim, co-founder and managing partner at Goodwater Capital said, “Vietnam is a very unique market with a very rapidly growing middle class and increasing smartphone penetration. We see Vietnam a core market in Southeast Asia.”
Likewise, two partners at the US venture capital fund 500 Startups have founded Ascend Vietnam Ventures, focusing on investing in seed-stage companies in Vietnam.
The early-stage investments will range from $500,000 to $2 million for tech startups in sectors like finance, education, healthcare, productivity, and future of work over three years. A third of those companies will receive further investment of up to $4 million each.
US investors are not only eyeing the fast-growing startups in Vietnam but also stepping up manufacturing activities. As of May 20, the US was Vietnam’s 11th-largest investor with the total registered capital of $9.54 billion across nearly 9,100 projects, according to the Ministry of Planning and Investment.
Many multinational US corporations such as Pfizer, Abbott Laboratories, Intel, Qualcomm, and Procter & Gamble are also seeing success and opportunity in Vietnam. Many of these multinationals have established local manufacturing operations and even invested in Vietnam-based companies to leverage local manufacturing and supply chain infrastructure.
In May, Procter & Gamble Indochina Ltd. was greenlit by Binh Duong People’s Committee to invest $44.8 million into its razor plant in Dong An Industrial Zone. After adjustment, the total investment capital of the project in the province reached $247.8 million.
In January, Intel Corporation made an additional investment of $475 million in Intel Products Vietnam (IPV) in Saigon Hi-Tech Park, which took Intel’s total in Vietnam to $1.5 billion. IPV is the largest assembly and test manufacturing facility in the Intel assembly and test network, and one of 10 manufacturing sites that Intel boasts globally. IPV also remains the largest US high-tech investment in Vietnam so far.
Meanwhile, Millennium Energy Corporation has proposed to develop a liquefied natural gas (LNG) centre and terminal warehouse in the southern area of Van Phong Economic Zone in the central province of Khanh Hoa, with the combined investment capital of over $27 billion. The American group also has been in talks with the Mekong Delta province of Soc Trang to build another LNG project at a total of $15 billion in the province.