The agreement on investing 60 million dollars on MJ Group by IDG Ventures, Rebate Networks and ru-Net is considered the biggest investment deal in the e-commerce sector. It is still too early to say about the success of MJ, but the presence of many investors in the market has brought new rays of hopes.
Tom Tran, General Director of MJ Group, said that the investment agreement allows the group to have better financial capability, which helps consolidate the leading position of the market and expand the business in the time to come.
The immediate goal of MJ Group is to double the staff to 1000 workers by 2012, upgrade the infrastructure conditions to provide online services, and develop new services in order to expand the connection network.
The investors all have committed to increase the investment capital in the future, if MJ group prospers.
More new investors
While IDG Ventures has been well-known in Vietnam as the venture fund which began injecting money in technology firms in Vietnam in 2003, which now has the ownership at 45 different companies, the other two remain unfamiliar in Vietnam. This is for the first time the three investors join forces in an investment deal which is higher than the average capital they poured into online service companies, about 2-5 million dollars for each deal.
Leonid Boguslavsky, Managing Director of ru-Net, said that this is the first investment deal of the company in Vietnam. However, ru-Net plans to expand its investment in Vietnam in the time to come, which would focus on e-commerce and online entertainment services.
Prior to the investment in MJ Group, ru-Net remained a quite unfamiliar name in Vietnam, though the company has been succeeding on the global market with the biggest Russian search portal—Yandex, which became the biggest dotcom company with the highest IPO value on Nasdaq in mid 2011.
Meanwhile, prior to the investment in MJ Group, German Rebate Networks once invested in nhommua.com, which is now leading the Vietnamese market in the field. Rebate Networks specializes in making investment in group buying and online services with its network now present in 30 countries.
Michael Brehm, Managing Director of Rebate Networks, said that it wants to penetrate with IDG, because IDG proves to be the partner who well understands the Vietnamese market.
Market given strength
It is too early to say if MJ Group can succeed in Vietnam and if it can lead the Vietnamese market. However, it is clear that MJ is cherishing a plan to create a powerful community connection network, thanks with the combination of a lot of different services.
The interests of many investment funds in the Vietnamese market have raised high hopes on the development of the online service market which has been going more slowly than previously expected.
Experts believe that it is now the right time to make investments in the e-commerce market in Vietnam, when the market’s scale has become much bigger than that of five or seven years ago.
The e-commerce market has experienced the initial development period, which was called the “filtration” period, after which only high quality applications can exist. A lot of kinds of services have been provided on the market, while the “big guys” who can lead the fields, have appeared. Many Vietnamese websites have been listed in the top 100 global websites, while supporting services and e-payment services have also developed accordingly.
According to Le Hong Minh, General Director of VNG, a company which has been developing with the capital from investment funds, Internet services have made a big leap in comparison with 2005 it started business. This has been explained by the joining and the competition of many service providers and the rapidly developed of the infrastructure which has helped create a big community of nearly 30 million people.
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