Surge in global investor interest buoys outlook for Vietnam startups VNG, MoMo
[HANOI] Le Hong Minh, chief executive of Vietnam’s first tech unicorn VNG, has ambitions for his company to serve a customer base three times the size of Vietnam’s population of roughly 100 million people.
The Internet company is roughly halfway to its goal. Minh believes international expansion is the key to getting to the milestone of 332 million users for its products and services.
Its recent effort to go for an initial public offering (IPO) in the US speaks to this ambition.
VNG, which has businesses in game publishing, music sharing, video streaming, messaging, news and mobile payments, filed for an IPO on the Nasdaq in August, and is reportedly hoping to list in the first half of 2024.
“(The US listing) is something that is really scaring us, because it involves significant risks: the risk of failure, and the risk of not being able to achieve the goal we want to achieve,” he said at the Vietnam Venture Summit 2023, an annual investment conference hosted by Vietnam’s Ministry of Planning and Investment.
“But this is something we believe that if we didn’t do, we wouldn’t really be able to take the company forward.”
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VNG had initially planned for an IPO in the US this year, it has been reported; however, the timeline was pushed back because of market volatility.
If it gets its timing right, the company will be able to tap a growing pool of international investors who have shown interest in Vietnam’s fast-growing economy, and the startups that are growing alongside.
At the Vietnam Venture Summit, 30 stakeholders made public their commitment to help the South-east Asian nation expand and internationalise its innovation ecosystem.
Among those who pledged help were the country’s tech unicorns VNG and MoMo, Singapore government-owned startup builder SGInnovate, the New York Stock Exchange (NYSE), and venture capital (VC) firms Golden Gate Ventures, Touchstone Partners, Ascend Vietnam Ventures and ThinkZone.
Vinnie Lauria, founding partner at Golden Gate Ventures, a co-organiser of the summit, said: “With a firm hold on the global supply chain, continued investment from multi-nationals, and a thriving startup ecosystem that is feeding the world’s appetite for innovation, Vietnam finds itself in a unique position of writing a new playbook for growth that other markets will follow.”
The South-east Asia-based VC believes that Vietnam’s extensive trade agreements and strengthened strategic partnerships with China, Singapore, Israel and the United States in the past year would create a long-term runway for the country – not only as a leading manufacturing powerhouse, but as a hub for high-value foreign direct investment.
Echoing this viewpoint, Vietnam’s Deputy Minister of Planning and Investment Tran Duy Dong said the government was working on making it easier for foreigners to invest in the country, and building ecosystems that support innovation and digitalisation.
The tech unicorn VNG is looking to the US for more than a listing venue. Last month, it said it wanted to expand partnerships with US companies in various fields. Among other things, it is building large language models, specifically for Vietnamese, based on open-source codes from American technology companies.
The company is not alone in eyeing an overseas listing.
Nguyen Manh Tuong, CEO of Vietnam-based fintech unicorn MoMo, last month asked the Vietnamese government to consider establishing a task force to support tech companies looking to tap funds from the public markets, both onshore and offshore.
Golden Gate Ventures said Vietnam’s rise as an economic power means it also has a significant line-up of international listings. Besides VNG, some potential candidates in the next 18 months are e-commerce marketplace operator Tiki, and retailer The CrownX.
“Vietnam has swiftly risen to prominence in Asia and continues to be a key area of focus for the NYSE,” said Delano Musafer, head of Asia-Pacific capital markets at NYSE. “I am excited by the number of Vietnamese companies showcasing continued innovation, growth and scalability.”
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