24-8-2023 (HANOI) VNG Ltd, a prominent player in the internet startup arena, has taken a significant stride by filing for an initial public offering (IPO) in the United States. This move marks a historic moment as VNG becomes the first Vietnamese technology company to pursue a listing on the prestigious New York stock exchange. It joins a growing list of companies that are eyeing IPOs as equity markets gradually regain momentum.
In its IPO plans, VNG intends to offer approximately 22 million shares, with the proposed price range to be disclosed in a subsequent filing with the US Securities and Exchange Commission. Notably, the company emphasized that it will remain under the control of its founders, Le Hong Minh and Vuong Quang Khai, according to its filing made on Wednesday. Furthermore, VNG Ltd will retain a 49% stake in VNG Corp, its operational arm in Vietnam.
Originally known as Vinagame, VNG Corp initiated its journey as a game publisher back in 2004. Over the years, it has expanded its portfolio to encompass a diverse range of services, including music sharing, video streaming, messaging, a news portal, and mobile payments. This strategic diversification has positioned VNG as a prominent player in Vietnam’s technology landscape. The company has been exploring the possibility of going public in the United States since at least 2017.
One of its standout products, the messaging app Zalo, has achieved remarkable success, overtaking Meta Platform Inc’s Facebook Messenger as the most widely used chat platform in Vietnam since 2020. With a staggering 75 million monthly active users, Zalo has become a staple in the lives of many Vietnamese.
In a heartfelt letter to investors included in the prospectus, VNG’s founders reflected on the company’s origins: “We were born after the war, in a nation that had found peace and unity, but was still struggling with underdevelopment and isolation. Little did we know how lucky we were when the Internet arrived in Vietnam in the middle of the 1990s. The world magically and suddenly opened the door for us.”
The IPO of VNG Ltd follows closely on the heels of the US debut of Vinfast Auto Ltd, a Vietnamese electric-vehicle manufacturer. Vinfast completed a merger with the blank-check company Black Spade Acquisition Co, valuing the company at a staggering $23 billion.
VNG’s potential listing adds impetus to an IPO market that has seen intermittent surges in activity. Other notable companies preparing to go public include chip designer Arm Holdings Ltd, set to debut in September, and firms like Instacart Inc., Klaviyo, and Birkenstock.
For VNG, gaming remains a core element of its global expansion strategy, complemented by revenue streams from artificial intelligence and cloud computing products. VNGGames, the gaming arm of the company, has established a presence in at least nine international studios, spanning countries such as Thailand, Singapore, Malaysia, Taipei, and China.
The IPO undertaking is led by prominent financial institutions, including Citigroup Inc, Morgan Stanley, UBS Group AG, and Bank of America Corp. Post-listing, the two founders will retain control over 51% of the voting power, courtesy of a dual-class share structure. Tencent Holdings Ltd is poised to hold a stake equating to 23% of the votes, while Singapore’s sovereign wealth fund, GIC Pte, will possess 5.4% of the votes.
In terms of financials, VNG reported a pretax loss of 614 billion dong ($25.6 million) for the first half of the year ending June 30, with total revenue amounting to 3.96 trillion dong.
