How Vietnam's first startup IPO in Japan 1

How Vietnam's first startup IPO in Japan 1

A month after Hybrid Technologies was listed on the Tokyo Stock Exchange, Tran Van Minh, the company's CEO, said `my hair is finally growing back`.

`I almost lost my senses at that time,` Tran Van Minh told VnExpress about the moment of ringing the IPO bell at the Tokyo stock exchange on December 23.

As of January 31, one share of Hybrid Technologies was trading at 529 yen.

The story of Hybrid Technologies is a `strange` event for this country’s market.

And Mr. Vu Hong Nam, Ambassador Extraordinary and Plenipotentiary of Vietnam in Japan, assessed the event as an important step for Vietnamese information technology-related companies to expand to Japan.

Hybrid Technologies is a 5-year-old technology startup, very young compared to the average age of 19 for Japanese businesses listed on the market.

How Vietnam's first startup IPO in Japan

CEO Tran Van Minh (middle) and members of the company’s Board of Directors at the Tokyo Stock Exchange.

Minh is also nicknamed `Minh Nhat`, partly because of his appearance and decades of working in the land of the rising sun.

In 2016, Minh, a former FPT employee in Japan, decided to start a business with Evolable Asia Solutions Co., the original name of Hybrid Technologies.

`At that time, I thought I was mature because I had the advantage of being in Japan long enough and had good relationships. In particular, I was inspired to do business and be my own boss from my seniors at FPT,` he recalled.

On the other hand, he also realized that starting a business in a market with a rapidly aging population will have many opportunities.

Minh’s business specializes in developing systems for about 250 Japanese customers, including large enterprises such as Yahoo Japan and DoCoMo – the country’s largest telecommunications service provider.

According to him, the special feature of the startup is that while sales and system design are done in Japan, development and programming are done in Vietnam.

Recalling the time he started work, Minh said that the capital at that time was about 1 billion VND.

In addition to its own initial investment, the startup was also contributed capital by a Japanese investor.

But in 2019, when the startup was renamed Hybrid Technologies, Minh realized it was time for a turning point.

`If it stays the same, the company’s revenue and sales will still be good and customers will still be steady. But I think Hybrid Technologies needs a stepping stone to be able to reach further and access more VIP contracts,` he said.

This is unprecedented for a company whose owner is Vietnamese.

`I don’t think I’m unrealistic or have any illusions,` Minh recalled.

When learning about the process, Minh said that IPO information in Japan is quite complicated.

At the same time, businesses must invite a reputable auditing unit to participate.

Minh also had to pass 3 interviews from the authorities, which as he described was so stressful that he lost his hair and lost sleep because if it did not match the reporting documents, the approval file could be rejected.

`Even though they sent about 10-20 questions for me to prepare, in 2 hours of answering, I was still incredibly stressed, I had to remember all the data, the situation, and the related legal regulations.

Besides, the cost of the IPO process for young businesses is also a big problem.

Therefore, the biggest challenge for Hybrid Technologies came at the end of the first quarter of 2020, when Covid-19 appeared.

In addition, Hybrid Technologies also decreased from a peak of 700 employees to 500 even though the company still paid full salaries and guaranteed benefits.

Faced with unfavorable business data, the securities company suggested postponing the IPO until 1-2 years later when the market is more stable.

However, Hybrid Technologies CEO believes that if it stops, all the effort will go down the drain and the business will return to the process of 3 years ago.

According to their survey, except for aviation and tourism customers who were heavily affected, other industries in Japan remained stable and developed during Covid-19.

`We also continuously change the way we do things. In fact, in misfortune there is also luck. The pandemic has made the need for digital transformation grow stronger,` Minh said.

After the IPO, CEO Tran Van Minh said he would use the new capital to recruit personnel and improve brand recognition, expand the market, and target larger businesses.

`For the time being, I have not considered paying dividends but will choose at another time. The important thing right now is to increase the value of the business,` he said.

In the next 3-5 years, Hybrid Technologies’ goal is to become a $1 billion company.

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