The VPC Blog: RST’s Thoughts On Our Journey To Our ASEAN Fund’s First Investment

Excuse the pop-culture “A-Team” allusion, but I love it when a plan comes together. The Valhalla Private Capital ASEAN Capital Fund has made first close of our CAD $25-million fund, and we have completed our first investment in a thriving, hyper-growth enterprise in Vietnam. Probably most exciting for me (and my Valhalla partners) was the coinvesting between Canadian and Asian investors (a primary objective of our emerging market strategy). We have successfully deployed the Valhalla model in Southeast Asia and our team is proud delivering on these early KPIs.

We love building and facilitating networks and ecosystems. The sum really is greater than the simple combination of the parts, because it is in working to build these networks and ecosystems that we have been able to see a very high caliber deal flow and meet some great entrepreneurs.

In that spirit I want to share some learnings from the process of establishing this fund.

I’ll start by saying I’m lucky to work with my fellow Managing Partners Jan Lederman and Glenn Yuen. The first, and perhaps most obvious learning I want to share is to be part of a smart, motivated team and be with people that author a shared vision. I’m certain Jan and Glenn will echo this sentiment.

BOOTS ON THE GROUND:

Valhalla’s history in the region extends back to 2016. Luke Krueger and I delivered the Valhalla Basecamp program in Myanmar, Nepal, and Vietnam as far back as 2016 through The Seed Global, an organization we created years ago with a social and philanthropic mandate to help kick-start startup ecosystems in developing economies.

These are the roots of our “overnight success”, the social agenda got replaced by the realization that just doing good deals would help change ecosystems. Luke had always said our early success was because of our “boots on the ground” approach, and the current ASEAN Fund builds on the need to be in the region as often as possible. Jan, Glenn, and I have spent a lot of time on the ground in Southeast Asia meeting with governments, investors, innovators, and academics in 24 months prior to initiating the Fund. We worked tirelessly to build relationships and understand the dynamics of the various markets in Southeast Asia. We continue to marvel at the rich innovation culture in the region overlaid with the hyper-growth market potential for that innovation.

Today, Glenn is in the process of relocating his family to Singapore in support of the Fund and our growth aspirations. These permanent boots on the ground are a clear demonstration to our local partners that we are truly invested in them and our mutual success.

CUPS OF TEA:

We believe that enduring success can only come from building authentic relationships. Taking the time to truly get to know our partners and exploring relationships beyond business can be the most rewarding part of the process. It takes many cups of tea over many meetings to create important relationships and it is anything but a paint-by-numbers exercise. Firstly, we’re convinced that the Silicon Valley model replicated in regions doesn’t work without building the relationships first. Secondly, not all deals are the next Google, but we are looking for them. The venture / venture debt capital space can too easily get reduced to term sheets and due diligence but, at the end of the day, Valhalla invests in people and ideas. What better way to develop shared understanding than by sharing cups of tea?

WALK THE TALK:

Life in places like Ho Chi Minh City can seem chaotic to the uninitiated but it is the underlying structure, the ability to rely on others, that makes it work. In this respect Valhalla further bolsters trust by ensuring we speak the hard truths when required in a respectful way. When an idea doesn’t fit our model or isn’t mature enough for capital, we take the time to provide honest feedback.

These commitments to being present, to forging real relationships, and to demonstrating we will keep our word take time and energy. There are others who take a more transactional approach and can find one-off successes. That, however, is not the Valhalla model. We willingly invest our time and energy along with our expertise and capital in growing networks and ecosystems along with thriving enterprises.

The Fund’s first investment, in Vietnam-based 411 Bike Repair, is a perfect illustration of the kinds of companies Valhalla wants to support. Based in Ho Chi Minh City, 411 Bike Repair is a fast-growing chain of motorbike repair shops with aspirations to expand across Vietnam and, ultimately, across Southeast Asia. There are more than 45 million motorbikes in Vietnam (second only to Taiwan in per capita density) as a primary mode of transportation. Bike repair is a fragmented marketplace of independent dealers who only do replacements and micro-businesses where the owner is the only mechanic.

411 Bike Repair, led by Founder and CEO Ms. Nguyen Huynh Van Vy, a dynamic entrepreneur who has already built one successful business in the construction industry, provides consistent and reliable options in this dramatically underserved space. In the six-months since we invested, Ms. Vy has seen her enterprise grow 35 per cent month-on-month. She has opened six new locations in Ho Chi Minh City and has plans for eight more shops imminently. We love stories like this, and we have a line on a few more of these great opportunities

Watch this space for more ASEAN Fund success stories.

R Stewart (Randy) Thompson

Photos:

Top Left: Randy Thompson & Luke Krueger in Veitnam, 2018

Top Right: 11 Bike Repair, Vietnam-2019

Centre: Randy Thompson, Jan Ledarman and Glenn Yuen, Vietnam-2019

Bottom Left: Duy presented hockey jersey by Jan Lederman

Bottom Right: Vy, Founder 411 with Jan Lederman

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