Saigon, Vietnam. Photo Credit: Peter Nguyen
Ho Chi Minh City-headquartered VNG Corporation, the technology company behind a number of Vietnamese video games as well as the Asian nation’s leading music streaming service, has officially filed for an IPO in the U.S.
19-year-old VNG just recently submitted its registration statement and prospectus, seeking to list on NASDAQ as VNG Limited approximately 21.69 million shares; the Cayman Islands-based listed entity would possess a 49 percent interest in the overarching VNG Corp.
Besides developing several games (and licensing titles including PUBG Mobile from “principal shareholder” Tencent), the business operates mobile messaging platform Zalo (which is said to boast 75 million monthly active users) and the above-highlighted Zing MP3 streaming service.
Zing, for its part, was conceived in 2007 and had 28.7 million monthly active users (MAUs) as of Q2 2023, according to VNG’s filing. For reference, Vietnam is home to about 100 million individuals, and Zing’s identified Q2 2023 usership actually marks a slight dip from that which VNG attached to 2020 (30.5 million MAUs) and 2021 (29.1 million).
In any event, the seldom-discussed streaming offering has licensing deals in place with the NetEase Cloud Music investor Sony Music Entertainment as well as Universal Music Group, execs emphasized – albeit without mentioning the final Big Three label. On top of a seemingly extensive music library, the platform provides access to an array of podcasts, a cursory look at Zing MP3 shows.
On the pricing front, Zing MP3 features both an ad-supported version and a premium tier, with the latter enabling fans to remove adverts, maintain a larger offline library, and “stream tracks with higher audio quality,” per the regulatory resource. (Spotify’s July of 2023 price hike in over 50 markets didn’t extend to Vietnam, where a month of premium currently costs 59,000₫/$2.46.)
Lastly, in terms of the pertinent details put out by VNG, execs acknowledged an ongoing stateside copyright infringement lawsuit levied by California-based Vietnamese music company Lang Van. About 14 months back, an appellate court overturned the complaint’s prior dismissal.
Regarding the operational significance of Tencent titles for VNG – and, in turn, its potential influence over the Vietnamese business’s operations – the prospectus disclosed the works’ revenue contributions as a percentage of total income. “In 2020, 2021 and 2022, games from our top two third-party game developers, affiliates of Tencent and Kingsoft, contributed 30.6%, 40.7% and 29.4% of our revenue,” the F-1 reads in part.
More broadly, it’ll be worth monitoring the growth trajectory of Zing MP3 moving forward – especially given Tencent’s stake in VNG as well as the historical difficulty that international players like Spotify and Apple Music have had unseating well-entrenched regional streaming platforms.
Earlier in August, Tencent Music (NYSE: TME) reported having roughly 100 million paid users as of Q2’s conclusion as well as record-high average revenue per subscriber.