F88 Advances Toward Vietnam IPO Amid Secured Lending Growth and Mekong Capital’s Backing

Vietnam’s financial sector is on the cusp of a landmark event as F88, the country’s largest secured lending chain, prepares for an initial public offering (IPO) as early as July 2025. The listing—targeting a $1 billion valuation—comes amid a strategic push to expand its footprint to 1,000 branches by 2026 and solidify its position in Vietnam’s $20 billion alternative finance market. Backed by Mekong Capital’s decade-long partnership, F88 has transformed from a niche pawnshop operator into a financial services powerhouse, serving over 8 million customers through a network of 868 branches.

F88’s Rise: From Pawnshops to Financial Inclusion

F88’s business model hinges on providing fast, affordable loans to micro and small businesses (MSMEs) and underserved individuals through collateral-based lending. By leveraging motorbike and vehicle registration documents as collateral, F88 has built a scalable model with minimal credit risk. Its 2024 financial results underscore this strategy’s success: net profit surged 34% year-on-year to $13.7 million, while revenue hit $130.9 million, a 23% increase.

The company’s expansion ambitions are equally bold. F88 aims to grow its branch count to 1,000 by 2026, complemented by partnerships with 4,000 affiliated stores—a hybrid offline/digital network designed to reach 10 million customers by 2025. This strategy aligns with Vietnam’s push to deepen financial inclusion, where over 40% of adults remain unbanked.

Mekong Capital’s Crucial Role

Mekong Capital, a leading Vietnamese private equity firm, has been pivotal to F88’s growth. Since its initial $20 million investment in 2016 (via Mekong Enterprise Fund III), Mekong has helped F88 scale from 11 branches to 300 by 2020. A subsequent $50 million funding round in 2023—$20 million from Mekong’s Fund IV—fueled tech upgrades, brand-building, and talent recruitment. Today, Mekong holds a 20% stake, with founder Chris Freund lauding F88’s potential to become “Vietnam’s Mobile World,” a reference to the telecom giant that pioneered mass-market services in the region.

Mekong’s support extends beyond capital. The firm’s emphasis on corporate governance and risk management helped F88 navigate a 2023 media crisis, during which F88’s culture-driven resilience—rooted in CEO Phung Anh Tuan’s leadership—prevented employee attrition and stabilized operations.

Market Conditions and IPO Prospects

Vietnam’s IPO market has been sluggish, with only one fintech listing in 2024 raising $37 million. However, 2025 offers tailwinds: GDP growth is projected at 7.5–8%, and regulatory reforms aim to simplify listings and attract foreign capital. F88’s strong fundamentals—debt-to-equity ratio of 1.7 (vs. industry median 4.6), non-performing loans at just 1.2%—position it as a standout candidate.

Analysts highlight F88’s three core strengths for investors:
1. Scalability: Its branch-light, tech-enabled model reduces costs (CIR of 12.6%) while boosting accessibility.
2. Regulatory Favorability: As Vietnam’s largest licensed pawnshop chain, F88 benefits from a government push to formalize informal lending.
3. Diversification: Expanding into microinsurance (now 11.8% of revenue) and digital remittances opens new revenue streams.

Risks and Considerations

Despite its momentum, F88 faces challenges. The IPO market’s recovery remains uncertain, with global investors cautious on emerging markets. Competition from banks and fintechs could also cap margins. Additionally, F88’s reliance on collateral-heavy lending leaves it vulnerable to economic downturns, though its 2024 stress test showed it could withstand a 50% drop in loan demand.

Conclusion: A Strategic Bet on Vietnam’s Financial Future

F88’s IPO represents a compelling opportunity to invest in Vietnam’s financial inclusion story. With a robust balance sheet, Mekong Capital’s proven track record, and a scalable model, F88 is well-positioned to capitalize on the country’s 7.5% GDP growth trajectory.

At a $1 billion valuation, F88’s price-to-earnings (P/E) ratio of ~50x (based on 2024 profits) may seem high, but it reflects its growth potential and sector leadership. By comparison, regional peers like Indonesia’s OVO (part of Gojek) trade at 40–60x P/E in early-stage listings.

Investors should weigh F88’s risks against its dominance in a $20 billion market. If the IPO proceeds, it could unlock liquidity for shareholders while funding F88’s regional ambitions—already hinted at with plans for Southeast Asian expansion. For now, F88’s July 2025 listing remains a critical milestone in Vietnam’s evolving financial landscape.