Doing Business

VinFast: A Vietnamese Dream on the Global Stage

Trường Lăng

October 3, 2023

Doing Business

VinFast: A Vietnamese Dream on the Global Stage

Trường Lăng

October 3, 2023

In the heart of Vietnam’s burgeoning economic landscape, unfolds a remarkable tale of innovation, determination, and international triumph. VinFast, a subsidiary of Vingroup and Vietnam’s largest electric vehicle manufacturer, has recently etched its presence on the Nasdaq, boasting a market capitalization exceeding 23 billion USD.

The resonating sound of the bell at Nasdaq, signifying its official listing on the world’s most substantial capital market, stands as a historic milestone in VinFast’s trajectory. This achievement not only ushers in novel prospects for VinFast to access international capital markets, thus propelling its robust future development, but also serves as a pioneering emblem for Vietnamese brands venturing across boundaries.

The odyssey of VinFast onto the global canvas

Emerged in 2017, VinFast swiftly ascended as Vietnam’s premier electric vehicle (EV) manufacturer. Orchestrating a comprehensive EV ecosystem encompassing SUVs, scooters, and buses, VinFast’s influence stretched from Vietnam to North America and, soon, Europe. The state-of-the-art automobile facility in Hai Phong, boasting an impressive automation rate of 90%, coupled with an annual production capacity of up to 300,000 vehicles, exemplifies its unwavering commitment to cutting-edge technology and efficiency.

VinFast on US market
VinFast on US market. Source: courtesy of VinFast

By the close of 2022, VinFast unveiled its filing of a registration application under Form F-1 with the US Securities Exchange Commission (SEC) for an initial public offering (IPO).

However, in early June 2023, VinFast made a strategic pivot by retracting its previously submitted IPO application from December 2022 and opted to pursue a new avenue by merging with Black Spade Company for its US listing endeavors. This transition underscores a procedural shift in VinFast’s roadmap towards listing in the US market, while reinforcing the brand’s adaptive approach to strategic growth.

In the middle of May 2023, the strategic merger between VinFast and Black Spade Acquisition Co (traded as BSAQ on NYSE) was officially announced. Following this transaction, VinFast commanded a valuation surpassing 23 billion USD, fortified by its intent to debut on the US stock exchange.

According to experts, this entails a distinct listing method known as a SPAC business, undertaken through Black Spade. This echoes a growing trend among Asian startups seeking US stock market presence. For instance, Grab Holdings opted to amalgamate with Altimeter Growth, culminating in GRAB shares being traded on the Nasdaq stock exchange in December 2021. This contrasts with traditional IPOs, where companies issue shares to the public before stock exchange listing.

Unlike traditional IPOs, the SPAC route involves merging with a SPAC business and subsequently converting SPAC-listed shares into the company’s own shares. This expedited process can be accomplished within a few months, considerably shorter than the conventional half-year IPO registration cycle with the SEC.

On August 15, 2023, the resonant sound of VinFast’s launch bell reverberated across the US stock exchange Nasdaq Global Select Market, solidifying its status as a publicly listed company. With a market capitalization exceeding 23 billion USD and the trading code VFS, this significant event immediately followed VinFast’s successful amalgamation with Black Spade on August 14, 2023.

Decoding Vinfast’s SPAC choice 

The dichotomy between IPOs and SPAC listings represents divergent pathways toward the same objective.

Notably, a backdoor listing involves the merger of a non-public enterprise with a publicly-listed entity, circumventing the necessity for an initial public offering. This approach proves viable when timing, conditions, or readiness for an IPO are incongruent. Through this merger, the existing listed entity incorporates the non-public company, intertwining their assets and operations. Shareholders of the listed company receive shares in proportion to the agreed-upon ratio, facilitating the transition.

Evidently, such a stratagem diverges from the prevailing IPO-centered discourse in Vietnam. Hence, strategic clarity must precede corporate planning, as each trajectory presents distinct merits and drawbacks. Primarily, the variance lies in the capital infusion; an IPO typically injects immediate funds via share issuance, while SPAC listings necessitate subsequent fund-raising initiatives to maintain financial momentum.

Furthermore, the temporal and procedural disparities favor the SPAC approach, offering shorter  timelines and higher likelihood of success, albeit demanding robust investment in maintaining investor relations and financial transparency.

To encapsulate, SPACs surmount several impediments intrinsic to traditional IPOs, including procedural intricacies, cost factors, and temporal concerns. These factors collectively shape a more favorable landscape for companies eyeing the stock market for capital growth.

New way of capital generation for Vietnamese ventures

In the wake of VinFast’s resounding success, the landscape of capital raising for Vietnamese ventures is undergoing a paradigm shift. As enterprises in Vietnam explore avenues to scale and innovate, the realm of capital acquisition is no longer a conventional hurdle, but an opportunity to redefine norms.

The journey of VinFast underscores the critical role that SPACs can play in enabling Vietnamese startups to access international markets. While traditional IPOs remain a hallmark of corporate advancement, the unique attributes of SPAC listings present an attractive alternative, replete with swifter timelines and streamlined procedures. The ability to sidestep the prolonged IPO process and the potential to garner immediate attention from investors is an invaluable proposition for startups that seek agility without compromising on their growth trajectory.

Loship, a burgeoning Vietnamese freight forwarding enterprise, sets its sights on a 2024 listing on the New York Stock Exchange (NYSE), contingent on achieving profitability. This impending IPO holds the potential to galvanize Loship’s enduring expansion.

However, it cannot be denied that venturing into the global market poses distinct challenges, primarily stemming from the unfamiliarity of Southeast Asian businesses among global investors. This hurdle calls for alternative capital procurement strategies, with SPACs emerging as a viable conduit. Nguyen Hoang Trung, CEO and Co-founder of Loship, reinforces the pragmatic appeal of SPACs for Vietnamese startups like his own.

Likewise, VNG Joint Stock Company contemplates an NYSE listing through a SPAC, projecting a valuation ranging from 2 to 3 billion USD.

The strategic adoption of SPACs by companies like VinFast can serve as an inspiration for others to explore this route. While the journey of each company is unique, the precedent set by these pioneers demonstrates that innovation is not limited to product design or technology—it extends to the very core of business models, financial strategies, and expansion plans.

The evolution of capital raising in Vietnam’s startup landscape is underway, and VinFast’s listing exemplifies a new era of global engagement in this regard. This era invites Vietnamese entrepreneurs to reimagine their trajectories, embrace novel strategies, and march forward with unwavering confidence in their vision.

As the Vietnamese startup ecosystem continues to mature, the lessons from VinFast’s strategic choices resonate loudly: progress is never linear, and innovation extends far beyond products. It is a journey marked by resilience, adaptability, and the audacity to challenge conventions.

In the end, it’s not solely about capital; it’s about the transformational power that capital can effectuate. It’s about scaling aspirations, expanding reach, and making indelible marks on the global stage. With the right blend of innovation, strategic vision, and determination, Vietnamese startups can carve their narratives of success, much like VinFast has done, and propel the nation’s entrepreneurial spirit into a future unbound by borders.

Key Considerations for Companies Seeking SPAC Listings

For companies in Vietnam or elsewhere considering SPAC listings, certain key factors merit attention:

VinFast A Vietnamese Dream on the Global Stage
VinFast A Vietnamese Dream on the Global Stage

Final thoughts 

In retrospect, VinFast’s awe-inspiring journey to the pinnacle of the US stock market is symbolic of Vietnam’s growing presence in global business arenas. 

In closing, the VinFast saga resounds as a testament to innovation, adaptability, and the bold pursuit of success. This historic endeavor illuminates a transformative path for Vietnamese businesses, reflecting the maturing landscape of global entrepreneurship. To join this evolution, explore the possibilities and chart your course to international prominence.Unlock the potential of global expansion with expert guidance. Contact us at Viettonkin today to discuss the possibility of leveraging SPAC to bring your company to the global market.

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