Vietnam’s largest homegrown e-commerce platform Tiki has raised 1 trillion Vietnamese dong (US$43.5 million) from a corporate bond issuance and plans to raise more capital in upcoming funding rounds.

The Ho Chi Minh City-based company says it will use the total sum to increase its working capital, grow investments in its subsidiaries, expand warehouses, invest in its warehouse management and logistics systems, and fund advertising and marketing campaigns.

For the latest issuance, which started this March and completed mid-June, the two-year bonds are non-convertible with a fixed-interest rate of 13% per annum, one of the highest rates in the local market. The company says more than 97% of the buyers were Vietnamese individual professional investors, with two domestic institutional and two foreign investors also participating.

The issuance implies a valuation of US$600 million for 100% of its equity, an equivalent of US$26.2 (or 603,000 dong) per share, with the total number of shares being almost 23 million, according to Tiki.

The e-commerce site was founded in 2010 by Tran Ngoc Thai Son with his own US$5,000. The software engineer, who holds a master’s degree from the University of New South Wales, kicked off the company by writing the code himself, purchasing 100 English books from Amazon, and then delivered them on his motorbike in Ho Chi Minh City, Vietnam’s economic hub. In 2013, Sumitomo Corporation came in as a strategic partner, taking a 30% stake and making Tiki the first e-commerce firm in Vietnam to receive investment from the Japanese company.

Tran, who runs Tiki, holds a 20.1% stake in the company, equal to roughly US$121 million. Foreign investors, among them, Chinese online retailer JD.com and Singapore’s Ubiquitous Traders, hold a 49.4% stake.

In June 2020, Tiki raised US$130 million in a funding round led by Northstar Group, a Singapore-based private equity firm with investments in companies across Southeast Asia. Vietnamese media reports say the company expects more funding rounds, and has plans for an initial public offering (IPO) with the timeline yet to be revealed.

In 2020, Tran urged the Vietnamese government to loosen its regulations regarding e-commerce listings. Under the current regulations, a Vietnamese company must show profit for three years before launching an IPO, which is restrictive as e-commerce platforms usually burn money rather than post profits in their early stages of development.

Tiki stands for two Vietnamese words that translate as “convenient and economical”. At present, the all-in-one e-commerce platform has more than 3,000 employees and an avant-garde warehouse management system, able to handle almost two million orders a month. Though Tiki is Vietnam’s largest homegrown e-commerce site, it is the second-most popular in terms of hits – behind rival Shopee, owned by Singapore’s Sea.

In Vietnam, the Covid-19 pandemic brought a boost to digital retailers last year, with 30% more Vietnamese buying everything from food to electronics online, according to Ho Chi Minh City-based Infocus Mekong Research, a market research company specializing in mobile, custom and integrated strategic research in Cambodia, Laos, Myanmar and Vietnam.