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Unlocking Value in Vietnam Evolving Private Equity Market
Vietnam’s private equity market is entering a transformative phase, driven by resilient mid-market growth, strong sectoral tailwinds, and sweeping legal reforms. As investors pivot toward scalable, tech-driven ventures, regulatory changes are unlocking faster deal execution and greater transparency, positioning Vietnam as Southeast Asia’s next premier destination for private capital deployment.
Vietnam private equity market overview
The absence of significant large-scale transactions in 2024 resulted in a substantial decline in disclosed deal values compared to the previous year. This occurred despite a relatively small decrease in deal volume, from 42 to 31 transactions, with a total value of US$326 million.
This shows that investors have become more selective and are exercising greater caution when evaluating companies with significant cash outflows or negative cash positions. As the cost of capital has increased significantly, investors are increasingly preferring companies with solid financial sustainability.
However, in early 2025, a wave of renewed optimism emerged, marked by Techcoop’s landmark US$70 million Series A funding, one of the largest agritech deals in Southeast Asia, reflecting a growing investor appetite for scalable, technology-led ventures. Additionally, according to the latest report by the IMARC Group, the private equity market is projected to grow at a compound annual growth rate (CAGR) of 10.10 percent from 2024 to 2032. This momentum signals a strong pipeline of opportunities ahead for both venture and growth-stage investors.
Key sector-specific private equity deal highlights
In 2024, Technology (including IT, fintech, and communication services), along with Healthcare and Retail, emerged as the most resilient sectors, consistently attracting strong investor interest. Among these, IT, Retail, and Communication Services stand out as up-and-coming areas within the mid-market segment.
Beyond these core sectors, Education and Renewable Energy continue to draw attention from investors, driven by strong consumer spending prospects, increased healthcare awareness, and Vietnam’s favorable long-term demographic trends.
Retail
A notable example in the retail space was Mobile World Joint Stock Company (MWG) selling a 5 percent stake in Bach Hoa Xanh Investment Company to Chinese investment firm CDH Investments for US$72 million. The transaction provided MWG with much-needed capital to support Bach Hoa Xanh’s operations and expansion, as the chain aims to achieve post-tax profitability beginning in 2024.
Healthcare
Vietnamese retailer FPT Digital Retail JSC is open to proposals from advisors regarding the potential sale of a minority stake, up to 10%, in its pharmacy subsidiary, FPT Long Chau Pharma. The company may offer a 5% to 10% share in FPT Long Chau to financial investors through a private placement later in 2025 or in the first six months of the year. The exact deal size is yet to be determined and will depend on negotiations with interested investors.
Private equity firm Warburg Pincus has disclosed its investment in the Xuyen A private general hospital group. This move by Warburg Pincus, the leading global private equity investor in Vietnam, underscores its strategic focus on the nation’s rapidly growing healthcare sector. Xuyen A possesses and manages a network of four major, multi-specialized tertiary hospitals across the country.
Education
Private equity firm Excelsior Capital Vietnam Partners has made an investment in Kapla Vietnam, a Vietnamese English language training company established in 2022. Kapla has grown to operate six centers throughout Ho Chi Minh City. The financial details of the investment were not made public.
Promising prospects in the realm of mid-market transactions
Market caution fuels momentum in mid-market transactions
In spite of the broader market slowdown, the US$100M – US$ 300M deal segment demonstrated notable resilience in 2024. Capital deployed in this range climbed to $700 million, an increase of 2.7 times compared to $264 million in 2023, while the number of deals rose from two to three.
The median deal size for transactions under US$100 million has remained fairly consistent over time, suggesting steady investment in early and growth-stage companies. In contrast, the US$100M – US$300M and over US$300M segments showed signs of improvement in 2024, indicating a slow comeback of larger deals and increasing investor confidence in significant transactions.
This suggests that the mid-market is emerging as a key growth engine within Vietnam’s private equity landscape, bridging the gap between early-stage innovation and large-scale institutional investment.
The valuation gap between mid-market and large-cap deals is often attributed to the maturity and perceived stability of larger businesses. Large corporations typically boast more polished operations, institutionalized processes, and established governance structures, which makes them appear less volatile during turbulent times. However, in Vietnam, many mid-market businesses are on the cusp of transformation, scaling from regional to national presence, professionalizing their operations, and unlocking significant value through improved management and strategic growth.
Mid-market companies themselves are typically smaller and earlier in their growth trajectory, offering significant room for expansion. Many companies are in the process of broadening their product or service offerings, scaling from local to national markets, and operating in fragmented sectors that are ripe for consolidation through mergers and acquisitions (M&A). Importantly, founder- or family-owned businesses often form the core of mid-market transactions, requiring unique expertise in building out professional management teams and implementing institutional systems for the first time. While these challenges can be complex, they frequently lead to significant growth potential when managed effectively.
Lower valuations and leverage are hallmarks of mid-market transactions
In challenging macro environments, such as those marked by rising interest rates, tightening credit conditions, or global economic slowdowns, highly leveraged deals can become vulnerable, especially when earnings are under pressure. In contrast, mid-market companies in Vietnam, often backed by local private equity firms with deep market knowledge, tend to have more conservative capital structures. This not only provides downside protection for investors but also preserves strategic flexibility, allowing companies to continue investing in growth initiatives rather than being forced to prioritize debt servicing.
Lower valuations in the mid-market have historically resulted in deals being executed with less leverage. While operational resilience is attractive in theory, the mid-market offers a key advantage: lower leverage levels. This characteristic helps shield equity values from the sharper impact of declining valuation multiples and profitability during economic downturns. Moreover, lower leverage provides room for value creation through operational improvements, rather than relying primarily on financial maneuvers.
In Vietnam’s mid-market, where many businesses are still in the early stages of professionalization, private equity firms can drive transformation through initiatives such as building out management teams, enhancing digital capabilities, introducing performance-based key performance indicators (KPIs), and streamlining supply chains. These improvements often lead to more substantial earnings growth, which compounds over time and ultimately increases exit multiples.
Additionally, exit options in the mid-market are becoming increasingly flexible and diversified. Whether through trade sales to strategic buyers, secondary buyouts, or even initial public offerings (IPOs), as Vietnam’s capital markets deepen, investors have multiple pathways to realize gains. As more Vietnamese businesses seek structured growth and eventual succession planning, private equity firms that focus on value creation rather than leverage-driven returns will continue to find compelling opportunities.
Ultimately, the combination of lower leverage risk, operational upside, and favorable entry valuations makes Vietnam’s mid-market not just resilient but also uniquely positioned to outperform in both stable and uncertain market cycles.
Regulatory developments have impacted Vietnam’s private equity landscape
Amendments to the Investment Law 2020
Taking effect from 1 January 2025, Vietnam’s amended Investment Law introduces a Special Procedure that simplifies and speeds up the investment process for high-tech and strategic sector projects. By reducing approvals and fast-tracking the issuance of Investment Registration Certificates (IRCs), it enhances deal certainty and lowers regulatory barriers. This reform is a major boost for private equity firms, enabling quicker capital deployment and improving the ease of doing business. It also encourages investments in innovation-driven sectors, such as technology and clean energy, aligning with Vietnam’s growth priorities. Overall, the change makes Vietnam’s private equity market more efficient, transparent, and attractive to foreign and institutional investors.
Regulations on corporate bond purchases and sales by credit institutions and foreign bank branches
Amendments to Circular No. 16/2021/TT-NHNN, which entered into effect on August 12, 2024, require bond-issuing enterprises to disclose related individuals and organizations before credit institutions or foreign bank branches can purchase their bonds. This enhances transparency, reduces credit risk, and strengthens investor confidence.
Securities transaction rules in Vietnam’s securities trading system
Circular No. 68/2024/TT-BTC introduces key reforms to Vietnam’s securities market, directly impacting private equity by improving transparency and foreign investor access. Notably, it eliminates the requirement for pre-margin deposits, enabling foreign investors to place buy orders without having full funds at the time of trading, thereby boosting liquidity and deal flexibility. Securities firms will cover unpaid amounts, thereby reducing settlement risk.
Additionally, mandatory English-language disclosures enhance the accessibility and transparency of information for foreign investors. These measures aim to upgrade Vietnam from a frontier to an emerging market, making its capital markets more robust, trustworthy, and appealing to global private equity and institutional investors.
In brief
Vietnam’s private equity market is poised for significant growth, driven by a resilient mid-market and favorable sectoral dynamics. Despite a dip in large-scale transactions in 2024, investor interest in scalable, tech-driven ventures remains strong, as highlighted by notable deals in the technology, healthcare, and retail sectors. The mid-market segment, in particular, has emerged as a critical growth area, bridging early-stage innovation with larger institutional investments. As the market evolves, renewed investor confidence and legal reforms are expected to further enhance Vietnam’s position as a key destination for private equity in Southeast Asia.
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Vietnam Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Asia, including ASEAN, China, and India. For editorial matters, contact us here and for a complimentary subscription to our products, please click here. For assistance with investments into Vietnam, please contact us at [email protected] or visit us at www.dezshira.com.
Dezan Shira & Associates assists foreign investors throughout Asia from offices across the world, including in Hanoi, Ho Chi Minh City, and Da Nang. We also maintain offices or have alliance partners assisting foreign investors in China, Hong Kong SAR, Dubai (UAE), Indonesia, Singapore, Philippines, Malaysia, Thailand, Bangladesh, Italy, Germany, the United States, and Australia.
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