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Vietnam delivery startup Loship strives for rare US IPO

Investor demand has been driving Southeast Asian companies to record valuations

Vietnam delivery startup Loship dreams of listing in the U.S., a goal that has proved elusive for Southeast Asia's tech giants.   © Loship

HO CHI MINH CITY -- Delivery startup Loship aims to become the first Vietnamese company to list on a U.S. stock exchange in more than a decade, its CEO told Nikkei Asia, demonstrating the kind of ambition that international investors are stoking as they scour the region for deals.

Fresh off a $12 million funding round co-led by Ant Group-backed BAce Capital, Loship said it hopes to debut on the New York Stock Exchange by 2024, after reaching profitability in 18 to 24 months.

Amid a tech crackdown in China, investor cash is streaming into Southeast Asia and India, propelling loss-making startups from Grab to Zomato to record valuations.

Ho Chi Minh City-based Loship, which has attracted 2 million customers in Vietnam's fast-growing but intensely competitive market, is now navigating a grueling COVID lockdown that has caused unprecedented disruption and cleared streets of motorbike drivers.

CEO Nguyen Hoang Trung, who co-founded the company four years ago, is confident Loship will make it through the current crisis and then expand by targeting high-margin orders and copying the strategies of Chinese internet companies.

In Vietnam, a country of 98 million people, Loship faces more than a dozen rivals, from Temasek-backed AhaMove to regional giants Gojek and Grab, likely its biggest competitors.

"We lack drivers, [but] my competitors also [do]," Trung said in a video interview. "This is an opportunity for us to outcompete" the field.

The 29-year-old CEO compared the battle to a Nascar road race. When the drivers hit the hardest part of the course, the curves, the best ones pull ahead, he said.

Founder and CEO Nguyen Hoang Trung is the driving force behind Loship. (Photo courtesy of Loship)

Alongside BAce Capital, last week's pre-series C funding round was co-led by Hong Kong-listed Sun Hung Kai & Co. Money also came from investors who used to work at Skype, Starbucks and BNP Paribas. The round valued Loship at $100 million, DealStreetAsia reported. Trung declined to confirm the valuation.

Delivery giants from the region are already trying to warm up U.S. public markets. Indonesia's Gojek, the ride-hailing business-turned-superapp, is planning a flotation while Singapore's Grab announced it will merge with Nasdaq-listed special purpose acquisition company Altimeter Growth. Grab, however, has had to push its public debut to the end of 2021 due to new regulatory requirements.

The first Vietnamese company to float in the U.S., infrastructure business Cavico, was delisted from the Nasdaq for missing securities filings deadlines in 2011, less than two years after its debut.

VNG, a gaming and messaging giant, was striving to be Vietnam's next U.S. listing but has been quiet since starting talks with Nasdaq in 2017. More recently, U.S.-based SPACs have approached Tiki, Vietnam's biggest e-commerce company, DealStreetAsia reported this week.

Vietnamese companies face a daunting set of challenges, such as gaining state approval, before they can sell shares abroad.

Trung said the pandemic has pushed many first-time users onto the internet who will keep using the Loship app after COVID wanes.

Most of Loship's business currently comes from delivering groceries and boxed lunches. It also ferries flowers, medicines and other low-order, high-margin items from warehouses to shoppers.

Another growth strategy was suggested by BAce Capital, whose partners were directors at Alibaba Group and Ant Group. Drawing on their knowledge of Chinese trends, Loship added a game to its app, just as China's Pinduoduo added gaming to its e-commerce platform.

Trung likened this kind of multifunctionality to a supermarket, where shoppers can wander not knowing what they'll buy. Loship users may pull up the app intending to play games, not shop, but wind up making purchases. Vietnam's biggest e-wallet, MoMo, is playing with a similar strategy.

"What happened in China will happen in Vietnam," Trung said. "Among Vietnamese, we have that saying."

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