Source: AFP
VNG co-founder Le Hong Minh’s first taste of international competition was as a player for Vietnam in an early e-sports tournament in South Korea.
Two decades later, he says he’s ready to take on the world’s best again as he takes his tech company public.
The company — based in the bustling business hub of Ho Chi Minh City — is one of Vietnam’s leading game publishers, but also has a digital wallet, cloud services and Vietnam’s most popular messaging platform.
Months after Vietnamese electric vehicle maker VinFast made its Nasdaq debut, hitting headlines around the world as its valuation soared and then crashed, VNG is also planning a New York listing.
“I challenge the game team by saying that in the next three to five years we have to become a global game company,” Minh, 46, told AFP from his office on the banks of the Saigon River.
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To do that, “we need to be on a global stage, with access to global capital and talent.”
Source: AFP
In Vietnam, VNG’s products are already deeply embedded in people’s lives.
The Zalo app has 75 million active users in a country of 100 million people, surpassing Facebook and making it Vietnam’s most popular messaging platform.
The communist nation has a young, tech-savvy population, but they’re not the only ones using Zalo, whose default language is Vietnamese and which is tailored to the domestic market.
“Zalo is very convenient for us to use,” Ha Thi Minh Hoan, 74, told AFP. “As we grow older, we stay home more and use Zalo to communicate, share photos, chat, have fun with each other.
“If there is no Zalo, life can be a bit boring and monotonous I think.”
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Small beginnings
VNG was born in 2004 as Vinagame, a start-up of just five people, who prepared the launch of their first online game — and Vietnam — by traveling around the country on motorbikes.
They put up posters for the game in 5,000 Internet cafes, the founders say.
Source: AFP
Now they’ve moved into fintech and artificial intelligence, with a mission to show the world what Vietnam — one of the world’s fastest-growing economies — and its engineers are capable of.
However, gaming remains a large part of the business plan, with 80% of revenue still earned in this segment.
Publishing about 10 games a year in Vietnam and various parts of Southeast Asia, including Thailand and Indonesia, they are looking to expand further into Latin America and the Middle East, where they also want to promote games they make in-house.
“It’s a natural progression,” said Lisa Hanson, CEO of Niko Partners, an Asian gaming market intelligence firm, noting that Singapore’s Sea, a gaming and e-commerce company, had found success in South and Middle Asia. Sunrise with mobile games. Free Fire.
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Two years ago Vinagame co-founder Minh traveled from a then poor and underdeveloped Vietnam to play eSports in one of the first World Cyber Games, held in Daejeon, South Korea in 2002.
“I still remember the thrill. I told myself this is the pinnacle of my career as a gamer,” he said.
“The ultimate goal of any good guy is to… play with the best people in the world, right?”
He has the same goal for VNG, he says, which as Vietnam’s first billion-dollar start-up is promoting its “homegrown digital ecosystem” to investors around the world.
Challenges ahead
Now is the right time to do it, said Huy Pham, a senior lecturer in economics at RMIT University in Ho Chi Minh City.
“When VinFast debuted, they really caught the attention of international investors,” he said.
Source: AFP
“So there is growing momentum (with Vietnamese companies) — it’s the best time to make money.”
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The company counts Chinese internet giant Tencent and Singaporean state investor Temasek among its shareholders.
But it will need access to serious cash as it plans to build a large language model tailored to Vietnam, it added, as well as expand the reach of its games.
The company suffered total losses of $86.7 million in 2022 and $27.4 million in the first half of 2023, the company said in a filing with the US Securities and Exchange Commission (SEC) in August.
“If they expand to another market, that will increase costs… it will increase losses,” Huy said.
And while its messaging platform is doing well, payments app ZaloPay faces stiff competition from other providers like Momo and ShopeePay, “some of which have greater financial resources than us,” VNG’s founders admitted in the SEC filing.
For Minh, after seeing the internet transform his childhood Vietnam, it was time for a new challenge.
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“Vietnamese companies have become much more capable and more confident,” he said. “We have to look beyond our borders.”
Source: AFP