Deal focus: Mekong joins Nhat Tinh’s second trip

“Rarely have we ever invested in entrepreneurs on their second act,” says Chad Ovel, a partner at Mekong Capital. “That puts us in a position where we can really focus on very industry-specific interventions with them, rather than having to do a lot of the business basics.”

That rare opportunity came via Nhat Tin Investment Trading Development, the Vietnam-based GP’s latest investment. The express delivery company was launched three years ago by the team that founded Tin Thanh Express in 2001 and sold it to Hong Kong-listed Kerry Logistics in 2012. Now Mekong believes that the founders’ experience will give them a critical edge as they focus on the country’s blooming online retail sector.

Nhat Tin’s founders started their repeat journey in 2014, but by the time Mekong came onboard the company already had more than 200 transport vehicles that handle 20,000 orders per day. Nhat Tin is a major delivery provider for Mobile World, another Mekong investee and one of Vietnam’s largest mobile phone chains, along with a number of other electronics stores and other major retailers.

“We are big believers in the growth of chain retail, for which Nhat Tin is very well placed,” says Ovel. “We also liked the express logistics sector more broadly because e-commerce is growing very quickly in this market, and we see the largest and most powerful online retailers are actually large brick-and-mortar retailers. Having this nationwide backbone of daily delivery to thousands of stores, Nhat Tin is also well placed to be an excellent online delivery provider for the same large retail chains.”

Nhat Tin’s fleet of long-haul trucks also gives it an edge for deliveries to customers outside of the major cities. Its competitors are mainly based in Hanoi and Ho Chi Minh City and operate via motorbikes that lack the range to reach into remote provinces, which Mekong sees as the biggest growth area for e-commerce. The company can service the lower end of the e-commerce market as well, through its delivery centers where small sellers can drop off packages.

Mekong’s investment size is undisclosed, though Ovel confirmed it fell in the firm’s typical range of $6-15 million. The GP sees its role as respecting the management’s experience and demonstrated strengths, while still finding ways to contribute to the company’s development. In particular, the firm hopes to help Nhat Tin pivot from its focus on the B2B market to fully embrace the B2C opportunity that it has just started to recognize and build a strong customer focus into the management culture.

“We have found over our past investments that helping a company make that transition to being customer-centric is a really strong point of differentiation in this market that accelerates growth,” says Ovel. “We’ve got a framework on how to assist companies to do that, and we’ve already launched that process with Nhat Tin."

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• Topics
• Southeast Asia
• Expansion
• Support services
• Vietnam
• Mekong Capital
• Growth capital
• Logistics