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In the Midst of a Slump in Chinese Listings, Vietnamese Companies are eyeing the US IPO Market

A new wave of Asia-based companies is considering initial public offerings (IPOs) in the U.S., marking a departure from the previous trend dominated by Chinese startups. While Vietnamese electric car company VinFast made headlines with its U.S. listing in August through a merger with Black Spade Acquisition, other firms are exploring similar paths. Vietnamese tech unicorn VNG has filed for a Nasdaq listing, and discussions with more companies in Vietnam and the surrounding region about U.S. IPOs are reportedly underway.

The move signifies a shift in the traditional landscape, challenging the dominance of Chinese companies in U.S. listings. The success of VinFast’s listing, despite capital controls, has set a precedent for companies in the region to explore IPO opportunities in the U.S. Drew Bernstein, co-chairman of accounting firm MarcumAsia, notes that as local companies grow, they are outgrowing their domestic markets’ capacity to provide the required capital. The growing startup ecosystem in Vietnam, characterized by increased availability of capital and a surge in domestic economic growth, is attracting Vietnamese diaspora and fostering a conducive environment for startups.

Several Vietnamese startups, when approached about their U.S. IPO plans, indicated that any listing was still in the distant future. However, the rapid growth of local startups over the last 15 years has made the prospect more plausible. The success of Southeast Asian ride-hailing company Grab has inspired Vietnamese companies to consider expanding beyond their domestic market to regional business. Given the global aspirations of companies like ELSA, an English learning platform that uses AI, a U.S. IPO is seen as a way to enhance their global footprint.

Out of 103 U.S. IPOs in 2023, 10 were from Southeast Asian companies, split between Singapore and Malaysia. While this trend doesn’t replace Chinese IPOs in the U.S., it creates new opportunities and diversifies the IPO landscape. George Chan, global IPO leader at EY, expects a surge in Southeast Asian companies reaching the IPO stage in the next 12 to 18 months. Despite the momentum, the recovery of global IPO markets remains a crucial factor for companies seriously considering U.S. listings.

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