Validus Vietnam, an SME growth finance platform, Do Ventures, an early-stage venture capital company, and TTC Group, a multi-industry conglomerate, launched today a joint venture to help Vietnamese SMEs receive credit.
TTC Group took involved in the JV through its subsidiary DHA Corporation, a real estate, health, and sports investor.
The JV intends to promote financial inclusion in Vietnam and help neglected SMEs develop. It will make use of TTC’s huge ecosystem of SMEs in the energy, real estate, cane sugar, and hotel sectors in Vietnam. At the same time, Do Ventures’ fintech experience will help Validus achieve its growth goals, and the JV will benefit from future synergies with Do Ventures’ portfolio firms.
In Vietnam’s economy, small and medium-sized businesses (SMEs) play a critical role. Access to financing, on the other hand, remains a major barrier to SME development in the country. The funding deficit for SMEs accounts for 12% of the country’s GDP (GDP).
According to a World Bank survey, the lack of access to credit has worsened throughout the COVID-19 crisis, as liquidity remains an issue in the face of persistent demand reduction. Around 50% of businesses have cash flow that is less than three months, and more than 60% of businesses have experienced financial issues.
Vy Le, General Partner of Do Ventures, said, “The pandemic has accelerated the digital transformation of SMEs in Vietnam, and there is a big opportunity for fintech firms to create meaningful and lasting impact through partnerships and technology. We look forward to harnessing synergies to strengthen SME resilience, drive growth for SMEs, and in turn, the economy.”
Validus has given over $1 billion in SME loans in Singapore, Vietnam, Indonesia, and Thailand since its start in 2015. FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures, and VinaCapital Ventures are among the company’s investors.
Do Ventures is a $50 million early-stage venture capital firm based in the United States. It looks for investment possibilities in technology businesses that may create useful goods and services for Vietnamese and Southeast Asian customers.