Vietnamese technology company announces US$36.5 million investment
Under the terms of the agreement, FPT received a total investment of US$36.5 million, from TPG, through its TPG Ventures fund, and Intel Capital. This marks one of the largest cross-border investments into Vietnam by leading global investment firms, underlining the long-term confidence that institutional investors have in the country.
"FPT is already an information-communications technology leader in Vietnam. We intend to leverage the capabilities and financing from leading investors TPG and Intel Capital to enter new business lines and to expand internationally," said Truong Gia Binh, CEO of FPT.
"This is a landmark occasion for both Vietnam and FPT. We believe this deal underscores the potential and capabilities within Vietnam and is a milestone in the country's efforts towards joining the WTO."
With the infusion of capital and global expertise from the investment firms, FPT intends to explore new product and services lines. The company, which is already a software-development services provider to Japan, also will have increased capability to expand its products and services to other geographies. Additionally, Vivek Paul, a partner with TPG, will serve as Special Strategic Advisor to FPT, bringing his global technology industry experience and leadership to help FPT achieve its global ambitions.
Sing Wang, a partner with TPG based in Hong Kong, said, "This is a historic deal for TPG in Vietnam, which is an increasingly enticing destination for outsourced services and foreign investment."
Tim Dattels, also a partner with TPG, added, "In partnering with FPT, we are joining with Vietnam's national champion in the ICT industry."
Arvind Sodhani, President of Intel Capital, said, "Our investment in FPT reflects Intel Capital's global presence and reach in emerging markets, and is a testament to our continuing efforts to encourage entrepreneurship and technology innovation worldwide. We see strong prospects for Vietnam's IT sector and look forward to making a contribution to Vietnam's success through support of fast-growing companies, such as FPT."
TPG's Paul said "Vietnam has the second-highest annual GDP growth rate in Asia-Pacific, behind only China, a literacy rate of over 96 percent, a rapidly growing middle class, and a government committed to economic reform. These are all key building blocks that allow a country to compete globally."
At nearly US$50 billion, the GDP of Vietnam has averaged 7.5 percent annual growth since 2001, with a high of 8.4 percent last year. According to research by investment bank NM Rothschild & Sons, Ltd., the advisor on the deal, exports between January and July of this year topped US$22 billion, a year-over-year increase of 25 percent; foreign direct investment into the country reached US$5.8 billion last year, a 37 percent increase over 2004.
Varun Kapur, managing director, Intel Capital Asia Pacific, added, "This first-of-its-kind investment is a milestone for Vietnam, and reflects Intel Capital's confidence in the market and its business climate. Venture investing has the potential to contribute significantly to the growth of Vietnam's IT industry."
This deal highlights the core investment strategies of both TPG Ventures and Intel Capital, which support profitable and innovative enterprises with solid management teams that are well positioned in their respective fields. The ICT market in Vietnam has been growing 20 percent annually and is valued at over US$800 million, according to research by Rothschild.
The number of Internet users in Vietnam is predicted to climb to nearly 13 million this year from only 500,000 in 2000. The number of Internet and mobile phone users in Vietnam is growing the fastest of any country in Asia-Pacific. The country's mobile subscribers are increasing at nearly 63 percent each year.
