Vietnam’s first unicorn is finally serious about its global gaming ambitions

Before Grab and Gojek came along, VNG and Garena were the only two unicorns in Southeast Asia. While the rivalry between the super apps centers around ride-hailing and food delivery, the Vietnamese internet company and Singapore-based digital firm have been duking it out in gaming since around a decade ago.

VNG campus in Ho Chi Minh City./ Photo credit: VNG

However, their trajectories have diverged over the years. While Garena’s parent firm Sea has morphed into a New York-listed tech titan with a market capitalization of over US$100 billion, local media estimated last year that VNG’s valuation was about US$2.2 billion.

Sea has expanded into a global player, while VNG has trained its sights squarely on the domestic market.

But that may no longer be the case for VNG, which has been promoting its overseas plans more recently. At a November 2020 event held in Hanoi, CEO and co-founder Le Hong Minh said the company’s goal is to generate most of its total revenue from the global market in the next three to four years.

Gaming at its core

From its beginnings as VinaGame, VNG has built a digital services empire that spans social media (Zalo), online media (Zing News), music streaming (Zing MP3), ecommerce (over 22% ownership interest in Tiki), financial services (e-wallet ZaloPay) and cloud services (VNG Cloud).

Tech in Asia previously wrote about Zalo and how the popular messaging platform is eyeing a super-app model. We have also covered VNG extensively in the last 10 years.

In this 2013 interview with Tech in Asia, Le already alluded to VNG’s international ambition: “We think that game development is a global business, not a local business.”

VNG co-founder and CEO Le Hong Minh / Photo credit: World Economic Forum

But seven years later, the company’s much-anticipated initial public offering abroad has yet to materialize despite making close to US$226 million in revenue and a net profit of US$19.8 million in 2019. VNG has not released its full year 2020 results but its fourth quarter report showed a net loss of about US$9.7 million.

And even with its strong foothold as a broader internet company, gaming still contributes more than 80% of VNG’s total revenue.

But unlike game publishing where VNG used to have a clear first-mover advantage, the company is far from being the market leader in social media, ecommerce and financial services – sectors that are extremely competitive in Vietnam.

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