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IDG Ventures has eyes for Vietnam

VietNamNet Bridge – IDG Ventures (IDGV) has announced it will inject money in three more Vietnamese companies and projects, including the websites, yeuamnhac, VinaPay Company, and Cyworld, a social forum.

According to Rachan Reddy, Deputy Director of IDGV, the fund follows a three stage investment process when making investment in Vietnamese companies. It will pump 40% of total capital in the first stage, another 40% in the second, and 20% in the company’s developing stage. However, IDGV will make one-stop investment in the three companies.

The newly announced investment has raised the total number of companies IDGV has injected money in to 14.

Website yeuamnhac run by the Yeu Am Nhac Joint Stock Company is one of the three companies. This is a professional forum specialising in music established in 2003. More than 500,000 members have joined the forum.

The other company of the three is VinaPay, established in 2006, providing online payment services for MobiFone, VinaPhone, Hanoi Telecom, Electricity of Vietnam, S-Fone and Viettel.

The third company is Cyworld, a forum about society run and developed by SK Communications, a member of the Republic of Korea’s SK Telecom.

All three companies are considered to have potential to develop, which can meet the investment criteria set by IDGV. Especially, they all have transparent financial policies and follow standardised regulations in their operation.

Mr Rachan has revealed that IDGV is now considering many other files of companies, and it is expected that six more companies will catch IDGV’s eye by the end of 2007

He has denied the opinion that the disbursement pace has been slow, saying that the current disbursement process was going as expected. He said that IDGV was entering the second stage of investment, when the investment process would be sped up, after the first stage, the market exploration period. The disbursement pace is expected to be faster in the next stage.

Answering the question about the effectiveness of the 11 finalised investment deals, Mr Rachan said that all of them could bring efficiency at different levels; however, IDGV is especially satisfied with the investment in VinaGame and MSS.

On average, IDGV spends $50,000-3mil on every investment deal, and the fund has disbursed 20% of its total capital.

Mr Rachan said that IDGV does not attract Vietnamese companies with its financial capability. In fact, if Vietnamese companies have good projects, they can easily raise funds for the projects in current circumstances, both from domestic and foreign sources. Vietnamese companies contact IDGV because they want to seek the investment value in technologies, corporate governance and business skills from IDGV’s experts.

During a recent visit to Vietnam by IDG’s President, he said that IDG would expand its investment into two new fields: education and health care. However, no investment deals in these areas have been announced so far.

In fact, according to Mr Rachan, IDGV is still eyeing companies operating in these fields. He said that the fund is now paying special attention to two education projects, and if everything goes smoothly, IDGV would announce investment deals in two projects. Meanwhile, no suitable projects in the health care sector have been found.