Vietnamese e-commerce startup Tiki raises $43.5m via corporate bonds

Vietnamese homegrown e-commerce company Tiki has raised 1 trillion dong ($43.5 million) through corporate bonds issuance to raise short-term capital, per its filing with the stock exchange.

This is the first time Tiki is issuing corporate bonds to raise capital. DealStreetAsia had first reported about Tiki’s corporate bond issue plan in May.

Issued during the March 16-June 13 period, the bonds carry a tenure of two years at a fixed interest rate of 13% per annum. 

The collateral for this bond is more than 2.1 million Tiki shares. The company issued these additional shares, bringing the total number of outstanding shares to nearly 23 million.

The value of each share after adjustment is nearly VND603,000, corresponding to the value of collateral assets of more than VND1.3 trillion. At the price, Tiki’s valuation is determined to be about VND 13,800 billion (equivalent to $600 million).  

Tiki will use the proceeds to increase its working capital, expand warehouses, invest in subsidiaries, and fund advertisement and marketing campaigns, among others.

Individual investors subscribed to over 90% of the total bond issue. A total of 139 investors – including 2 organisations, 135 domestic individuals, and 2 foreign individuals – participated in Tiki’s bonds issue. 

Founded in 2010 as a platform for selling books, Tiki has since grown into an e-commerce platform operating an online marketplace, fulfilment centres and logistics network.

Last year, Tiki added new services TikiPro that helps with the installation of home equipment and raw food delivery service TikiNgon. Tiki also operates a unit called TikiTrading to distribute certain product categories.

Last year, the planned merger between venture-backed e-commerce companies Tiki and Sendo, one of the most anticipated transactions in the country’s fledgeling tech ecosystem aimed to take on bigger rivals, fell through as shareholders of both the startups did not agree on merger terms.

Tiki reported losses of VND3.8 billion ($165,210) last year, down from a record VND1.7 trillion in 2019.

DealStreetAsia has also learnt that Tiki plans to make its public market debut on the Vietnamese stock market in 2023. In the next five years, Tiki is said to be looking to develop its financial services play by offering solutions to Tiki’s customers through collaborations with financial institutions and banks.