Vietnam-based private equity firm Asia Business Builders (ABB) has invested in local integrated pharmacy company Duoc Vuong Group.
Established in 2012, the Hanoi-based company operates an online ordering platform to streamline pharmaceutical access for pharmacies nationwide by providing timely, accurate updates on product availability, variety, and pricing trends, to help pharmacies with their purchasing and inventory decisions.
Duoc Vuong has fulfilment facilities in both Hanoi and Ho Chi Minh City.
The company is processing thousands of orders per day from pharmacies across Vietnam, Phi Cong Dzung, partner at ABB, told DealStreetAsia.
The pain points in the local pharmaceutical distribution chain, according to Dzung, lie in significant operational challenges encountered by traditional pharmacies, such as complex and opaque purchasing processes and limited operational expertise, and multilayer costs for pharmaceutical manufacturers to market their products. Duoc Vuong has created a direct link between manufacturers and 60,000 pharmacies in the country, he said.
Last year, ABB exited pharmacy retail chain Trung Son, as South Korea’s Dongwha Pharmaceutical acquired a 51% interest in the firm for 39.12 billion won ($30.2 million).
The PE firm continues to bet on Vietnam’s pharmaceutical sector, and Dzung said the market was expected to reach $16 billion by 2026, with a projected compound annual growth rate (CAGR) of approximately 10%.
“Additionally, the Vietnamese government is actively revising and enhancing pharmaceutical regulations to support the sector’s development as a strategic industry. We believe this presents a golden window of opportunity and are eager to participate in this transformation,” he added.
In May last year, Buymed, a local online medicine marketplace, had raised $51.5 million in a Series B funding round from investors including US International Development Finance Corporation (DFC), UOB Venture Management, South Korea’s Smilegate Investment ($2.5 million) and Cocoon Capital.
Medici, which is more active on the consumer side, has also raised more than $12 million in equity financing.
The investment in Duoc Vuong was made through ABB’s second private equity fund, which secured a $52-million first close late last year. DealStreetAsia earlier reported that the fund was seeking to raise $100 million. ABB PE Fund II has attracted commitments from the International Finance Corporation and Dutch development bank FMO.
ABB’s first fund closed at $20 million in 2018.
Dzung told DealStreetAsia that the second vehicle is anticipated to complete three to four more transactions by the end of Q1 2025.
Other portfolio companies of ABB include textbook publisher DTP Education Solutions, industrial services provider Care Solutions, KA Logistics, and smart living platform APLUS Home.
ABB also runs an advisory business. The merchant banking team was formed in 2013, and the PE arm was then launched after the firm closed over $200 million worth of strategic M&A transactions in Vietnam. To date, it has orchestrated investment and advisory transactions exceeding $500 million.
