Vietnamese tech unicorn VNG expects to have a loss of about US$27 million for the year due to the effects of Covid-19 and for further investments to grow its payment business, according to a statement from the company following its annual shareholder’s meeting.
Staff at VNG campus in Ho Chi Minh City / Photo credit: VNG
The company, however, is targeting revenues of about US$330 million this year, an increase of about 26% compared to its 2020 total revenue.
Formerly known as VinaGame, Vietnam’s first tech unicorn now has an estimated valuation of about US$2.2 billion. Besides gaming, where the Ho Chi Minh City-based company competes fiercely with Sea Group’s Garena, VNG’s digital services span several verticals including social media (Zalo), online media (Zing News), financial services (ZaloPay), and cloud services (VNG Cloud).
Earlier this year, Zalo officially outranked Facebook Messenger among the most used social media platforms in the country – a rare occasion when a local platform has outperformed a foreign counterpart. Last December, Zalo launched its voice-controlled Vietnamese language virtual assistant called Kiki, which can be accessed from the Zalo app or integrated with smart devices such as smart cars or speakers.
In the payment business, however, ZaloPay has trailed behind other heavyweights such as MoMo, ViettelPay, and AirPay (now rebranded as ShopeePay). According to the 2021 Mobile Wallets Report by London-based fintech company Boku, ZaloPay has a 5.3% market share while MoMo leads the segment with 53%.
See also: The key players in Vietnam’s fintech battleground
VNG is expected to continue pumping money into the subsidiary that operates ZaloPay. In 2020, the payment business incurred a loss of about US$29 million.
The tech unicorn also plans to issue nearly 7.1 million shares this year to domestic investors. The funding raised from the issue will be used for market expansion and to support investments in other tech startups, it said.
VNG currently owns a 22% stake in ecommerce player Tiki, 20% in logistics startup EcoTruck, and nearly 30% in gifting platform Got It.
Editing by Miguel Cordon and Arpit Nayak
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