HANOI -- Vietnamese e-commerce major Tiki, which we reported in March was raising a $75-million funding round led by private equity firm Northstar Group, is now looking at a larger financing deal.
We have learnt that the round has been upsized to $100 million with the backing of the firm's existing Korean investors, including Korea Investment Partners, STIC Investments and Sparklabs Ventures.
If Tiki reaches certain KPIs set by the investors, it could even raise as much as $150 million in this round, a source familiar with the development told DEALSTREETASIA.
When contacted, Tiki executives declined to comment.
The Ho Chi Minh City-based company has been the second most popular e-commerce business in Vietnam after taking over Alibaba-backed Lazada in the last quarter of 2018. It continues to trail Sea Limited's Shopee in the market.
The latest financing for Tiki follows a $44-million investment led by Chinese e-commerce giant JD.com in January 2018.
Earlier this month, Tiki and local warehouse management firm Unidepot announced a collaboration to expand the former's logistics network, starting with a 10,000-square metre fulfilment centre in 2019. The Vietnamese marketplace firm prefers to build its in-house logistics capacity and promises two-hour deliveries in cities where it owns warehouses.
E-commerce companies in Vietnam are still making losses, and Tiki is no exception. The firm reported accumulated loss of about VND 1 trillion over the last few years.
At the event with Unidepot, Tiki CEO Tran Thai Son said the losses were primarily due to the firm's investments in infrastructure, especially its fulfilment centres. "Starting with 100 square metres, Tiki now owns over 30,000 square metres of fulfilment centres, which is expected to reach 100,000 square metres in the next six to eight months," he said.
Son said his ambition for Tiki was to become the leading supply chain service provider not only for the e-commerce sector but also for the country's logistics industry.
"Supply chain is a billion-dollar industry in Vietnam with surprisingly rapid growth. However, Vietnam's supply chain has not achieved its peak efficiency. For example, for an order worth 10 dong, logistics costs can be up to 2.5 dong."
Tiki is understood to be Northstar's second investment in Vietnam after a $50-million funding in Topica Edtech Group last year. Korea Investment Partners is an investor in local digital entertainment platform Appota while STIC Investments has invested across different sectors in Vietnam.
DealstreetAsia is a financial news site based in Singapore focused on corporate investment activity in Southeast Asia and India. Nikkei recently announced the acquisition of a majority stake in the company.