How did VNG turn into Vietnam’s first unicorn?

The beginning-up story of gaming lovers

Le Hong Minh – founder, chairman and CEO of VNG – is thought to be a sport addict. Throughout the years of finding out Finance and Banking at Monash College (Australia), he devoted loads of time to that zeal.

Returning to Vietnam in 2001, Le Hong Minh labored for PwC auditing firm after which VinaCapital funding fund. Nevertheless, his ardour for the sport has by no means modified.

In 2003, Le Hong Minh and some mates arrange a small sport room to play video games and do some associated enterprise companies. By day, he’s a monetary officer, by evening he’s a sport store proprietor.

A yr later, Mr. Minh determined to give up his job and along with some mates with comparable pursuits established Vinagame firm (later renamed VNG). To discover a enterprise path for his or her firm, founders spend loads of time studying about profitable names within the discipline and assembly some potential companions. After a variety of failures, Minh was lastly trusted by KingSoft, giving him the chance to launch the sport Vo Lam Truyen Ky in Vietnam in 2005.

How did VNG become Vietnam's first unicorn?  - Photo 1.

Mr. Le Hong Minh is the co-founder, chairman and CEO of VNG – Vietnam’s first unicorn startup. Picture: VNG

Not having a lot cash in hand, the Vinagame group labored collectively to discover a method to promote the sport successfully and nonetheless lower your expenses. In the long run, everybody determined to print 10,000 posters, then a bunch of about 20 folks went to stick all of the posters in all of the machine rooms throughout the nation inside 15 days. This was a really new type of promoting at the moment.

This technique of Le Hong Minh and Vinagame was very profitable when in a short while, players everywhere in the nation knew the title Vo Lam Truyen Ky. Even the registration web site “crashed” when it opened due to overload.

From the success of Vo Lam Truyen Ky, Mr. Minh’s firm continues to launch different video games in Vietnam. By 2006, Vinagame’s income had reached 17 million USD, 6 occasions larger than 2005.

Apart from video games, the corporate progressively expanded into many different expertise segments similar to launching the e-commerce web site (later bought to FPT), the Zing Me social community, the Zing MP3 digital music platform, the app. Zalo messaging utility, ZaloPay e-wallet… Vinagame additionally modified its title to VNG.

In 2014, Le Hong Minh’s firm was valued at 1 billion USD by World Startup Report and have become the primary unicorn in Vietnam. By 2019, VNG was valued at $2.2 billion by the Singapore authorities’s Temasek funding fund.

VNG at the moment operates with four core companies: On-line video games; Connection platform; Finance & Funds and Cloud Providers. The corporate additionally invests in a variety of startups such because the e-commerce web site Tiki, the present supply platform Received It, and the expertise firm within the discipline of freight transport EcoTruck.

Throughout VNG’s 15th birthday, Mr. Le Hong Minh as soon as shared in regards to the firm’s 2332 aspiration.

“VNG units a brand new aspiration “2332” for the subsequent 5 years. 2332 signifies that taking the 2023 milestone, VNG will attain 320 million international customers, 32 million customers for brand spanking new merchandise, and 320,000 company clients. VNG will strive its greatest and focus its sources in direction of these milestones,” stated Mr. Minh.

The street to itemizing within the US

In line with sources of Bloomberg, VNG is contemplating itemizing shares within the US via a merger with a SPAC (particular objective acquisition firm). The supply stated the Vietnamese unicorn is at the moment working with monetary advisors to carry discussions with SPACs for a possible deal. This transaction may worth VNG at 2-Three billion USD.

Nevertheless, reply Bloomberg, a consultant of VNG stated that no choice on IPO or SPAC has been made or accepted. The corporate declined to remark additional on itemizing plans.

Beforehand, in Could 2017, Mr. Le Hong Minh and Nasdaq Group consultant Bob McCooey signed an settlement on VNG’s itemizing on the world’s second largest inventory alternate.

Itemizing within the US via SPAC is a development chosen by many Southeast Asian unicorns. Trip-hailing app Seize plans to IPO via merger with SPAC Altimeter Development. The corporate goals to boost greater than $four billion, thereby reaching a valuation of $39.6 billion. If the deal goes via, Seize may very well be the primary Southeast Asian unicorn to IPO within the US via a SPAC.

Just like Seize, on-line journey startup Traveloka can be stated to have plans to checklist within the US in 2021 via a SPAC.

How did VNG become Vietnam's first unicorn?  - Photo 2.

VNG units a loss plan in 2021.

VNG has many similarities with Sea Group – Singapore’s sport and e-commerce firm. Based by Forrest Li – a sport addict, Sea additionally began from a sport publishing firm after which expanded into different areas similar to e-commerce and on-line funds. The corporate listed on the New York Inventory Alternate in 2017 and is now valued at greater than $166 billion.

The information that VNG is predicted to IPO within the US makes many individuals anticipate that Vietnam’s unicorn can turn into a regional expertise “star” like Sea did.

In 2020, VNG’s internet income reached VND 6,024 billion, up 16.3% in comparison with 2019. Revenue earlier than and after tax decreased by 40% and 57% respectively in comparison with 2019, equal to VND 255 billion and 261. billion dong, however nonetheless considerably larger than the revenue plan accepted by the Basic Assembly of Shareholders in 2020 (- 246 billion dong).

Within the first half of this yr, VNG achieved greater than 3,500 billion VND in income, up 23%. Nevertheless, in complete, the corporate nonetheless lowered greater than 16% of internet revenue to 220 billion dong. In line with this yr’s plan, the corporate goals to realize income of greater than 7,600 billion dong. Revenue after tax is predicted to be destructive 619 billion dong as a result of technique of constant to give attention to funds, AI (synthetic intelligence) and Cloud, in addition to to forestall the extended results of the Covid-19 epidemic.

Linh Lam