Tech unicorn VNG to register on unlisted public company market

VNG, one of the four tech unicorns in Vietnam, is preparing to register its shares on the country's Unlisted Public Company Market (UPCoM).

Toward this, the corporation will fix the list of shareholders to register for concentrated depository at the Vietnam Securities Depository, serving the listing of its shares on the bourse.

The move is somewhat seen as a surprise as the Vietnamese-based tech "unicorn" had earlier announced that it would make an initial public offering (IPO) in the U.S. In July, a source told DealStreetAsia that VNG was getting very close to listing on the U.S. tech-heavy Nasdaq stock exchange, through the offering of 12.5% of its stake at the end of this year.

"Unicorn" is a startup with a valuation of more than $1 billion. VNG has also announced that its three foreign shareholders, namely Gamvest Pte. Ltd, Prosperous Prince Enterprises Limited, and Tenacious Bulldog Holdings Limited, had withdrawn their capital from VNG.

Previously, at its 2022 annual general meeting of shareholders, VNG proposed approving the IPO exemption for the share transfer transaction of VNG Limited - a legal entity registered on April 1, 2022 in the Cayman Islands. Accordingly, VNG Limited will receive the transfer of 16.9 million shares owned by 13 foreign shareholders, or 47.359% of all VNG shares.

With this stake, VNG Limited can be the legal entity to perform the IPO in the U.S. on behalf of VNG.

Founded in 2004 by Vietnamese businessman Le Hong Minh, 45 now, VNG is currently the leading technology services provider in Vietnam. It was officially valued at $1 billion in the World Startup Report, becoming the first unicorn in Vietnam.

VNG owns the Zalo messaging and calling application, holds over 65% in Zion Company (the owner of ZaloPay e-wallet), and has stakes in a number of other tech companies such as Tiki, Ecotruck, Got It, and FPT Online. Since the beginning of this year, VNG has been pouring capital into domestic and foreign tech startups and firms.

In February, VNG invested $22.5 million in Funding Societies, known as Modalku in Indonesia, which specializes in providing digital capital and B2B payments services for micro, small and medium enterprises across Southeast Asia.

Then, the corporation invested in Haegin - a mobile game developer in South Korea, expecting to expand its business activities in the international market to become a professional investor in Metaverse. VNG and venture capital fund Do Ventures have channeled $7 million into cross-border e-commerce startup OpenCommerce Group.

In 2022, VNG set a target of earning about VND10.18 trillion ($411.06 million) in revenue, the highest ever so far, up more than 33% from the previous year's figure and over four times higher than that 10 years ago. However, the company projected an after-tax loss of VND993 billion ($40.1 million).

In the first nine months of 2022, VNG achieved revenue of VND5.76 trillion ($232.75 million), up 1% over the same period. It suffered total losses before tax of VND764 billion ($30.85 million), mainly due to losses from affiliates and the ZaloPay owner. With these business results, VNG just completed only 56% of its yearly revenue plan.

As of September 30, 2022, VNG had chartered capital of VND358 billion ($14.46 million) and total assets of VND9.2 trillion ($371.56 million).

UPCoM is one of three bourses in Vietnam. The Ho Chi Minh Stock Exchange is the biggest with the highest criteria, while the other is the Hanoi Stock Exchange. UPCoM's goal is to encourage companies to list their stocks.