Life for the first Vietnamese company on Nasdaq

The company listed in November 2021 as the first Vietnam-based firm to complete an IPO on the US stock exchange. Society Pass had successfully raised US$28 million to do so.

Now, as the results continue to flow in nearly two years later, the process has been more than worth it.

Targeting e-commerce ecosystems, financial technology (fintech) and data-driven loyalty programs, Society Pass offers services to online retailers that operate in Vietnam, Indonesia, the Philippines, Singapore and Thailand.

Society Pass was founded by its CEO Dennis Nguyen, who currently holds a 68.7% stake in the company.

He used to run previously successful Food & Beverage brands, including the Mon Hue restaurant chain and The Kafe coffee chain.

Dennis Nguyen, CEO of Society Pass, the first Vietnamese enterprise listed on Nasdaq. Photo courtesy of SOPA

Nasdaq is the world’s first electronic stock exchange and includes listings of more than 3,700 stocks.

Along with the New York Stock Exchange (NYSE), Nasdaq is famous for excellent management, high stock liquidity, and an extremely rigorous corporate governance system.

The procedures for listing on the NYSE and Nasdaq are generally considered to be of a higher standard than most other stock markets, and the cost is higher, too.

Typically, businesses will approach Nasdaq to first discuss the requirements for listing, which are more relaxed than on the NYSE, and the success rate is higher (76% in 2021).

Nasdaq does not have as exclusive a reputation as NYSE, so it is often more suitable for emerging tech companies. Many giants, including Apple, Alphabet, Google, Microsoft, Meta and Tesla, have listed shares on Nasdaq.

9 months and $4 million

Dennis Nguyen said the length of the Nasdaq listing process depended on the complexity of each company’s financial statements, and the number of questions asked by the U.S. Securities and Exchange Commission (SEC) or Nasdaq itself.

Normally, it takes businesses some two years to complete the process, but Society Pass needed only nine months. Nguyen said it cost some $4 million, mostly in legal, accounting, investment banking and administrative fees.

The cost of listing on Nasdaq depends on many factors, such as company size, complexity of financial statements and costs payable to the investment bank.

To get listed on Nasdaq, businesses need to spend a lot of time and resources meeting two key audit and legal criteria, Nguyen said.

Companies can comply with these two regulations by establishing effective internal control mechanisms, conducting regular due diligence activities, disclosing truthful information, protecting individuals who speak out against wrongdoing (whistleblowers), developing a code of conduct, and forming an independent audit committee.

"Companies will have to accept the fact that this process can be fraught with obstacles without ‘shortcuts,’ so they need to assess whether they have enough time and money before they make a decision and start executing a plan," said Nguyen.

However, if successful, listing on international stock exchanges, especially in the US, can help companies access large capital and increase brand recognition on the market.

For Society Pass, the successful Nasdaq listing has helped the company continue to expand and diversify its scope of business.

Dennis Nguyen (center) and the Society Pass board of directors and shareholders celebrate its IPO on Nasdaq in November 2021. Photo courtesy of SOPA

After five years of operation and about 27 million shares on the U.S. bourse, Society Pass currently has 3.3 million customers and 200,000 sellers registered to use its platform.

In the 2019-2022 period, Society Pass posted strong revenue growth rates, from $10,000 to $6.1 million. Its

revenue is expected to surge to $42.7 million in 2023.

"This is a very rapid growth rate," said Nguyen.

The company’s strategic business model has been a large part of this, and the results have come mainly from Society Pass’s merging of eight companies.

Society Pass has created a digital ecosystem similar to an online shopping mall with stores connected to each other through its Society Point loyalty point system.

For example, in Vietnam, Society Pass operates lifestyle e-commerce platform Leflair, grocery delivery service Handycart, and online travel platform Nusatrip.

Usually, those who want to buy clothes will visit a fashion website, and those who want to book air tickets will go to a travel platform. Businesses often offer promotions such as "buy two get one free," and the accumulation of loyalty or rewards points to receive a discount on the next purchase.

Nguyen wanted to create a different shopping experience.

So when customers buy fashion items on Leflair, order food delivered through Handycart, or book air tickets on Nusatrip, they all earn loyalty points called Society Points.

This interconnected loyalty program is used on all platforms of the system, thereby helping retain customers better than a single loyalty program alone, according to Nguyen.

The CEO said he sees great opportunities for such a loyalty program in Vietnam, which has both a rapidly growing middle class, and an increasing number of mobile device and internet users.

This year Society Pass aims to conduct 7-10 mergers with a combined total capital of $75 million.

As the company’s ecosystem expands, Nguyen believes so will it’s volume of transactions and customer data, leading to bigger revenues.

Society Pass hopes to realize its goal of breaking even in the second quarter of this year.

"I’m proud to be Vietnamese"

Society Pass’s revenue has grown thousands of times in just a few years.

According to Nguyen, this reveals the efforts of the entire staff, consulting team, investors and family members who have supported him.

He said without their contribution, Society Pass would have never gone public in the U.S.

Building a good support network among investors, partners, colleagues and even family members is one of Dennis Nguyen’s strengths, according to Raynauld Liang, Society Pass’ CFO.

Having worked Dennis Nguyen for more than 10 years, Liang said he was impressed by his leadership qualities, analytical ability and professional ethics.

According to Liang, Nguyen invests a lot of time and effort to achieve his goals.

Liang likes how Dennis Nguyen always responds to emails, even late at night. "He seems to work 24 hours a day," Liang said.

As a Singaporean who has been to Vietnam many times over his 20-year career, Liang believes that Dennis Nguyen possesses the best qualities of Vietnamese people, including resilience, passion, and a goal-oriented nature.

Born and raised in Vietnam, Dennis Nguyen later emigrated with his family and studied in the U.S.

After graduating school, he worked for Citi Group, Credit Agricole and SMBC in Asia.

In the end, he followed his career path back to his fatherland, with the desire to make his own company thrive across the country.

"I’m proud to be Vietnamese, and want to be called a Vietnamese," Nguyen said.

He considers himself a diligent worker who is resilient to challenges, like many people in Vietnam.

Vietnamese people are also known for their industrious work ethic and willingness to spend extra time to achieve their goals, he said.

According to Nguyen, these qualities are essential in business because failure is part of the learning process and resilience can make a big difference.