Vietnam’s first tech unicorn VNG set for IPO. Here’s what you need to know

Thu Huong Le also contributed to this report.

After years of flirting with a US IPO, VNG Corporation finally filed for a Nasdaq listing last week.

Two years ago, Tech in Asia analyzed why Vietnamese tech companies were missing out on the Southeast Asian IPO party that Grab kicked off in December 2021.

At the time, most analysts suggested the country was in a relatively early stage of the tech cycle and regulations around foreign ownership remained a major hurdle for Vietnamese IPO hopefuls.

This explains why VNG’s upcoming public listing is a milestone worth noting.

In November 2022, VNG opened its data center in Ho Chi Minh City to serve its cloud business. / Photo credit: VNG

The company started out as VinaGame in 2004. Till today, more than 80% of its revenue still comes from gaming.

Similar to Sea Group, which also has its roots in gaming, VNG has expanded to other verticals spanning financial services, social media and messaging, and cloud services.

However, unlike Sea Group, it primarily serves the local market – and that might not be attractive enough to some foreign investors.

Tech in Asia took a look at the prospectus VNG submitted as part of its US IPO application – and here are our takeaways.

1. Its growth has slowed down

VNG is offering investors the opportunity to invest in a growing “homegrown digital ecosystem” in one of the world’s fastest-growing economies.

However, unlike Sea Group, it is preparing to list amid a market downturn and sluggish growth.

The Vietnamese company generated US$316 million in revenue in 2022 and US$166 million in the first half of 2023, up 2% and 4% respectively from the same period a year ago.

For comparison, Sea Group was listed in October 2017. Its revenue in the first six months of 2017 grew 17% from the same period a year earlier.

2. Fintech business is a drag on profits

3. It’s expected to spend more on sales and marketing

4. It has ample cash but needs to watch out for liabilities

5. It’s listing under an unusual structure