Mekong Capital strikes third deal from fourth fund

The Vietnam-focused firm’s investment in pawn shop chain F88 will be used to open another 50 branches in the country this year.

Ho Chi Minh City-headquartered Mekong Capital has recently invested in pawn shop chain F88, its third investment from its $112 million fourth fund Mekong Enterprise Fund (MEF) III.

Financial terms of the transaction of were not disclosed but the firm typically injects between $6 million to $15 million in each investment.

This is the firm’s third deal from MEF III, following its investments last year in Wrap and Roll Restaurants and transport provider ABA Corporation, according to a statement.

The firm is targeting another 5 investments under MEF III for the year, a spokesperson from Mekong Capital told Private Equity International.

Hanoi-based F88 pioneered the commercialisation of pawn services in 2013. The company operates 15 shops in Hanoi and surrounding areas. With Mekong Capital’s investment, F88 plans to expand to around 70 shops by the end of the year, and another 100 by 2020.

Commenting on the transaction Chris Freund, a partner with Mekong Capital, said: “F88 has established itself as a leading provider of professional pawn services in Hanoi and surrounding provinces. F88’s competitive edge is its entrepreneurial co-founders, professional management team, IT infrastructure, and strong corporate governance.”

Mekong Capital, with around $250 million of assets across four Vietnam-focused funds, primarily invests in both minority positions and buyouts in consumer-driven businesses.

Limited partners in the firm’s funds include the Netherlands Development Finance Company, the International Finance Corporation, and the University of Washington, according to PEI data.