Dropfoods, the largest smart vending machine operator in Vietnam, is launching an initial coin offering (ICO) on Sept 21 to raise US$9 million (S$12 million).
An ICO is an unregulated process by which a start-up raises funds by issuing cryptocoins known as tokens - similar to the shares issued by a company in an initial public offering. Investors who buy the cryptocoins do so in the hopes that as the start-up grows and succeeds, the value of the cryptocoin will rise.
In this case, Dropfoods will be issuing its own Dropcoins in the ICO, which is open only to accredited investors, the company said in a media statement yesterday .
These Dropcoins can be converted into government-issued fiat currency - say, Vietnamese dong - for cash withdrawal at a Dropfoods vending machine or to make purchases on the vending machines and on the Dropfoods app.
The coins will be limited and so Dropfoods expects that over time, they will become more sought after and rise in value, with more transactions on the platform. With the ICO proceeds, Dropfoods will install 1,000 new vending machines.
Customers can buy food items from these vending machines via the Dropfoods app. They can also use the app to top up their mobile credits, pay their utility bills and transfer money to other users.
Dropfoods operates in more than 40 locations in Vietnam and is backed by Sugar Ventures, a venture capital firm with shareholders in Japan, South Africa and Singapore.
Both Dropfoods and Sugar Ventures were founded by Dr Mark Hon, a serial entrepreneur and the chairman of Business Angel Network South East Asia.