Start-Up That Took On Facebook Plans To Go International

Zalo has 74.7 million month-to-month lively customers in Veitnam.

A Vietnamese web startup that is efficiently defended its dwelling market of 100 million individuals towards international giants like Facebook is now going into assault mode.

VNG Corp., Vietnam’s reply to Tencent Holdings Ltd. with video games, messaging, movies and music amongst its companies, is accelerating its worldwide enlargement, co-founder Le Hong Minh stated in an interview at its headquarters in Ho Chi Minh City. Games shall be its spearhead, and VNG additionally seeks so as to add international income from synthetic intelligence and cloud computing merchandise.

The tech startup’s success overseas can be a milestone for Vietnam, a Communist nation higher recognized for textiles and agriculture. As a part of its progress plans, VNG has taken steps towards being included on an area alternate for unlisted companies, typically a precursor for a list on an official alternate. The firm can also be reportedly eyeing a US itemizing — one thing Minh would not immediately verify.

“We want to be a global technology company,” stated Minh, additionally the corporate’s chief government officer. “So we have to play in the same playground, and access the best and obviously most demanding investor base in the world.”

VNG has emerged as one of many nation’s most watched startups and a US IPO would make it the primary Vietnamese tech firm to record in America. Its stock-market debut might comply with on the heels of Vietnamese electric-car maker Vinfast, which is concentrating on an IPO on the US inventory market as quickly as January.

VNGGames, the corporate’s gaming arm, is essential to its worldwide enlargement, Minh stated. It has customers in additional than 130 nations and expects to have 320 million prospects globally in 2023, in accordance with the unit’s web site. VNG has seven workplaces overseas, together with in Beijing, Taipei and Bangkok.

Formerly generally known as Vinagame, VNG had its begin as a recreation writer in 2004. It develops and publishes its personal titles in addition to native variations of worldwide hits, and has step by step expanded to a variety of companies, equivalent to music sharing, video streaming, messaging, a information portal and cell funds.

Its messaging app, Zalo, grew to become a breakaway success, overtaking Meta Platform Inc.’s Facebook Messenger in 2020 in Vietnam. It received over customers by permitting them to ship higher-quality photos and incorporating culturally related options equivalent to emojis reflecting the Tet Lunar New Year, Minh stated.

Zalo is now deeply embedded within the lifetime of Vietnamese who use it to talk, pay payments and store. The app had 74.7 million month-to-month lively customers in February, whereas Messenger had 67.8 million, in accordance with the Ministry of Information and Communications, the newest knowledge out there.

“We are proud about the fact that we openly competed with the best in the world,” Minh stated. “We were able to build a dominant product because of our product strength and ability to understand users.”

Yet discovering success overseas will not be simple. Gaming leaders equivalent to Tencent and Activision Blizzard Inc. have billions of {dollars} in growth and advertising budgets and world-famous titles. US apps from Facebook and Instagram to Twitter and YouTube dominate the social media market internationally, leaving China’s TikTookay as a uncommon main worldwide success story from Asia.

“VNG should warrant more investor attention because of its striking resemblance to that of Tencent, with businesses in online gaming, social messaging, fintech, e-commerce,” stated Alec Tseung, a companion at KT Capital Group, a Hong Kong-based analysis agency that focuses on Southeast Asia. Still, he stated VNG lacks among the benefits of its big Chinese counterpart. “The domestic dominance of Tencent could largely be thanks to the regulatory environment in China that VNG doesn’t have,” he stated.

A profitable IPO might give VNG firepower for its effort. Valued at $2.2 billion to $2.5 billion a couple of yr in the past, in accordance with an individual acquainted with the matter, it additionally has deep-pocketed backers equivalent to Tencent, and Singapore state traders GIC Pte and Temasek Holdings Pte.

VNG has been exploring going public within the US since no less than 2017. In July, media outlet IFR reported that the corporate is planning a US IPO of about $500 million by itemizing about 12.5% of its fairness as early as the top of this yr. VNG declined to touch upon US IPO plans.

In Vietnam, the corporate took steps in November to register its shares for depository forward of deliberate buying and selling on the Unlisted Public Companies Market, or UpCoM. The transfer is essentially the most important step but by VNG towards a stock-market itemizing.

Minh says he attracts inspiration from Silicon Valley and appears to copy its workplace campus tradition. Three years in the past VNG moved into its glass-walled atrium headquarters overlooking the Saigon River in an space beforehand recognized for textiles. The constructing options feng shui structure with open areas crammed with vegetation, cafes, a koi pond, state-of-the-art health club and workers clicking away at laptops whereas sitting on big beanbags.

Minh sees his firm, which was based at a time when solely a fraction of Vietnam’s inhabitants accessed the web, as a catalyst for the nation’s younger tech startup tradition. Vietnam final yr drew report excessive enterprise capital investments at greater than $1.4 billion in 165 offers, up from $451 million with 105 offers raised in 2020, in accordance with a report by Do Ventures and the National Innovation Center.

“In the future, Vietnam won’t just be known for coffee and manufacturing,” Minh stated. “We can build capabilities and people and provide services to the global technology industry.”

(Except for the headline, this story has not been edited by NDTV workers and is printed from a syndicated feed.)

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