HANOI -- Vietnamese e-payment solutions provider NextPay Holdings is considering a private placement to raise around $60-$100 million in the first quarter of next year, ahead of a planned stock market listing in 2022.
The company is looking to institutional and strategic foreign investors for the private placement and will offer them a 20% stake, Nguyen Huu Tuat, the company's co-founder and CEO, told DealStreetAsia. The company is in talks with five investors from the US, Japan and South Korea, he added.
Proceeds from the private placement will be used to broaden NextPay's merchant network in Vietnam and to expand its presence in overseas markets including Indonesia and Myanmar, Nguyen said.
NextPay is the first, and so far the only, fintech company in Vietnam to announce an initial public offering. It plans to raise as much as $100 million when it debuts on the Ho Chi Minh City Stock Exchange in 2022.
NextPay is the result of a merger between e-wallet service provider VIMO and point-of-sale startup mPOS, both of which were founded in 2014 by the incubator NextTech. The merged entity was formed in June last year and has 1.5 million e-wallet users and more than 35,000 acceptance points across 45 cities.
Last year, NextPay was in talks with five foreign investors to raise about $30 million in a series B funding round. However, the fundraising plan "changed at the last minute" and the company decided to pursue an IPO, Nguyen said.
NextPay was one of the pioneers in developing the mPOS payment network in Vietnam. The company has deployed more than 40,000 of these point-of-sale payment terminals and has become the leading enterprise in helping to develop a network of new merchants. The company aims to serve 300,000 merchants in the country by 2023, from the current 70,000.
Earlier this year, NextPay and Visa signed a memorandum of understanding to promote cashless payments in Vietnam. Visa will provide consultancy on business strategy, technology support and share its practical global experience in implementing and developing e-payments, helping NextPay deploy appropriate plans and strategies for Vietnam.
The e-payment solutions provider is targeting revenue of $33.7 million for 2020, compared with $19.2 million in 2019.
Speaking about the feasibility of NextPay's pre-IPO plan, Christian Konig, founder of Fintech News Network, said that NextPay's e-wallet VIMO had not yet been widely adopted and rivals such as Momo, ZaloPay, VNPAY, Payoo and ViettelPay were offering strong competition. "They certainly have to work hard ahead of their listing to be more transparent and communicate more accurately," Konig said.
However, he said that NextPay's valuation was optimistic. "Covid-19 might accelerate mobile payments in Vietnam, [but] we all know cash is still the main competitor of all those players," he said.
He forecast that Vietnam's e-payment market would see a huge consolidation.
In January last year, Vietnamese e-wallet MoMo carried out a series C funding round led by global private equity firm Warburg Pincus. While financial terms remain undisclosed, a source familiar with the matter said the investment was in the region of $100 million, making this one of the largest single rounds ever raised by a Vietnamese startup.
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