M&A in e-commerce, financial services and especially digital technology in the past year in Vietnam recorded strong growth steps. This wave is forecasted to have many prospects and promises to explode in the near future...
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According to a report by KPMG, in the first 10 months of 2021, the number of M&A deals has doubled and the total transaction value of these deals has tripled compared to 2020. The total recorded value at $8.8 billion in the first 10 months of 2021, an increase of 17.9% compared to the whole of 2020. Of which the consumer staples, finance and real estate sectors contribute about 60% of the total value.
M&A TRANSFER TO TECHNOLOGY
Despite the difficulties of the pandemic, the M&A market still has strong growth. Previously, real estate accounted for the majority of M&A activities, but now technology, healthcare, and financial services have emerged to lead this market. In particular, due to the pandemic, digital transformation and development of the digital economy in the world accelerated, leading to an increase in M&A activities in the field of digital technology, notably in public enterprises. high technology, has a large customer database, startups with potential new technology platforms...
Mr. Nguyen Thanh Tuyen, Deputy Director of the Information Technology Department, Ministry of Information and Communications, said that in Vietnam before 2015, M&A activities mainly focused in the field of real estate business services. However, in the period 2015-2018, there were a number of M&A deals in the digital technology field with great transfer value. Especially in the period of 2019-2021, there have been a series of big deals such as VNPay receiving an investment of 300 million USD from Softbank Vision Fund and GIC Fund or FPT acquiring the corporate governance platform Base...
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Sharing about some M&A trends in the technology sector, Mr. Nguyen Cong Ai, Deputy General Director of KPMG Vietnam, said that although banking and finance, consumer goods and real estate are still the three main industries. contributed the most to M&A deals in Vietnam recently, but KPMG's data shows that the technology industry has become one of the important industries.
M&A deals in the technology sector are increasing day by day with greater value. From 10-20 million USD deals, there have been more deals up to hundreds of millions USD invested in technology businesses.
Accordingly, the technology sector is receiving more and more attention from investors with the number of deals nearly doubling, from 22 in 2020 to 42 in 2021 and the total transaction value doubling. more than 3 times to nearly 1 billion USD. Notable transactions such as Tiki (258 million USD funding round), Sky Mavis (152 million USD funding round)…
Explaining the great interest of investors in the technology sector, a representative of KPMG Vietnam said that due to Vietnam's policies in supporting startups, creating a startup movement has had a pervasive effect. to the international investment community. Along with that, the quality of technology human resources in Vietnam has improved significantly.
STRONG GROWTH OUTLOOK
Experts emphasized that in the coming time, M&A in the field of digital technology is a very promising investment. M&A activities bring opportunities and resources for digital technology businesses. It is forecast that Vietnam will see a shift in the M&A wave in most fields from commodity production to Internet-based technology.
The potential of M&A in general and of the technology sector in Vietnam is huge. Mr. Ai forecasted that in 2022, the general M&A market could grow at 100%, double that of 2021. Particularly in the technology sector, the forecast could be even higher, about 150%. This is a trend and Vietnam has a basis to become a Startup Hub in the future.
To achieve these goals, besides the issue of building and perfecting institutions, it is necessary to have the dynamism of businesses and startups. It is important for technology businesses and startups to come up with breakthrough solutions. Consultants and investors are also interested in the quality of those who set up businesses. When these factors are met, a start-up business will also attract the interest of investors.
Founders are not only interested in technical issues, technological solutions but also financial aspects, especially the structure of the business, as well as the structure of the investment deal, to protect the value. enterprise assets.
Although Vietnam's digital technology is a field with great potential, potentially explosive M&A activities compared to other fields in the near future, technology companies in Vietnam are still in the formative stage. , mostly in the form of start-ups. Mr. Tuyen analyzed, many companies have good technology ideas but have not been able to develop into large-scale enterprises. business as well as financial capacity is not strong enough.
In addition, Vietnamese digital technology enterprises still have limitations and digital technology products are mostly focusing on serving the domestic market, there are not many regional and global products, so M&A activities have not been conducted yet. really exploded.
Investors are not only looking for a simple product idea, but also for a finished product that can be integrated into business activities. Investors with strong financial potential and operational support are often unwilling to pursue product ideas that do not have a clear shape, unless the product is really outstanding and different. Therefore, although M&A activities have prospered, there is still a lot of potential for further growth.
WHAT WHAT WHEN TECHNOLOGY M&A INCREASE?
Facing the strong growth of M&A activities in the technology sector, it has been suggested that this is a good thing or a worrisome thing?
From a technology startup perspective, Mr. Ho Phi An, founder and CEO of EI Industrial Company, emphasized that the increase in M&A in the technology sector is very encouraging. At that time, businesses will have access to abundant capital from large foreign investment funds.
It can be said that whether an increase in M&A is a concern or a joy and whether or not it will be acquired will depend on many different factors. “For technology companies that have a very fast growth life cycle, and once they have stepped into the world playing field, they cannot be afraid of being acquired. Besides, from a financial perspective, businesses like us are also oriented to one day divest from the company to pursue another dream. In essence, we are not afraid of being acquired, but the important thing is at what price," Mr. An stated.
Along with the process of economic restructuring and Vietnam's proactive entry into international markets, M&A activities are one of the effective methods to help businesses on the global playing field.
Dr. Nguyen Viet Khoi, Director of the Institute of Skills Education and Creative Intelligence, University of Economics (Hanoi National University), said that fighting takeovers in terms of technical solutions is not difficult. The important issue here is how much is the selling price?
Sharing more about this, Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competition, affirmed that whether you are happy or worried depends on the goal. “If we look at M&A as a movement of finance and investment, according to market principles, this increases the efficiency of resources used, which is good for both macro and micro. If the business goal wants to play a different playing field, looking for other values, this depends on the orientation, development strategy, and business values. Most importantly, what do we want?”, commented Mr. Vo Tri Thanh.
According to this expert, in order for M&A to be viewed from a global perspective, five issues must be dealt with. First, there is the issue of cross border data flow and the tax issue. Second, Vietnam has not yet adapted to the new business model, and behind that is the percentage of foreign investors. Third, the issue of capital mobilization, even in the form of investment funds with laws, we are still incomplete. Fourth, it is a matter of IPR data and intellectual property rights with this property. Finally, core technology and national security.
Emphasizing the importance of data, Mr. Nguyen Trong Duong, Deputy Director General in charge of operating the Business Management Department, said that data is not available, but data is generated from applications, the more applications are used. the more data there is. Data sovereignty is as important a matter as national sovereignty. Therefore, when selling, it is also necessary to ask who buys and buys for what? Who buys for profit and promotes development, who buys with bad intentions?...
By VnEconomy.vn