The Mekong Enterprise Fund III Ltd (MEF III), managed by private equity firm Mekong Capital, on January 11 inked an investment deal with the Hanoi-based pawn shop chain F88.
This is the third investment from the US$112.5 million fund since its launch in May 2015.
The value of the deal has not been disclosed, but it is believed to be an eight-digit number, according to a source familiar with the deal.
MEF III, which focuses on investments in Vietnamese consumer-driven businesses such as retail, restaurants, consumer products and consumer services, targets investments ranging from US$6-US$15 million each.
F88, founded in 2013, pioneered the commercialisation of pawn services in Vietnam. It currently operates 15 shops in Hanoi and the surrounding provinces and targets expanding its business network to 70 shops by the end of this year.
With strong investment in technology and a management system, the firm is committed to bringing fast, reliable and professional financial solutions to consumers, from which it can change social perceptions of the traditional pawn market.
F88 currently provides loans on diverse assets such as cars, motorcycles, mobile phones, laptops and jewellery.
“We are very proud and excited that F88 is the third investment we’ve announced for the Mekong Enterprise Fund III,” said Chris Freund, partner of Mekong Capital.
“F88’s competitive edge lies in its entrepreneurial co-founders, professional management team, IT infrastructure and strong corporate governance. We believe that with Mekong Capital’s well-proven approach towards adding value and our extensive network of international experts and resources, F88 will continue to improve its operations and successfully execute an ambitious nationwide expansion plan,” Freund said.
Admitting that F88 shares many similar business traits with mobile phone store chain The Gioi Di Đong (Mobile World), one of the fund’s most successful investments, such as starting out in a fledging and fragmented market, being the only business chain in the country and opting for transparency in management, Freund believes F88 has the opportunity to succeed.
Phung Anh Tuan, chairman and general director of F88, said the firm had differentiated itself from banks and financial institutions by targeting individual customers who are in urgent need of money with a small loan amount of under VND10 million (US$443).
With investment from Mekong Capital, F88 aims to expand the store chain to 300 shops by 2020 and hopes to go public in the next five years, Tuan said.