VNG – Verbundnetz Gas | Date: 2014-12-19
News Article | July 29, 2014
An interesting report from the Economist yesterday crunched data from the World Startup Report and lists the top three most valued tech companies in numerous countries. Of course, the US and China lead the world with the likes of Alibaba and Google topping the chart. In the top ten, there are only three Asian countries with their own tech titans: Japan, South Korea, and China. Australia appears in 13th place. But when we look at Southeast Asia, the data is even more jarring. Only Singapore, Vietnam, Malaysia, Thailand, Indoesia, and the Philippines make it onto the list of 50 nations with major homegrown tech companies. What may surprise some investors who are keen on investing into Southeast Asia is that Vietnam is just a few spots behind Singapore, which holds the 27th position; Singapore’s most valuable new tech company is Garena, pegged at $1 billion. Singapore’s second and third largest tech companies are Reebonz and Viki. Vietnam’s VNG helps the country into 30th position on the chart. VNG is valued at $1 billion as well. For Vietnam, it’s Vat Gia and VC Corp that fill up the podium places. The problem with this chart is that it will give you a skewed view of the worldwide startup ranking. In other words, it’s only ranking unicorns. It’s not giving each ecosystem a comprehensive picture. For all we know, there’s a host of startups that sit at the brink of unicorn status in a particular nation, but they won’t show up on this chart. That being said, it’s not easy to reach billion-dollar valuations. By mapping the top tech companies in the world, it shows the capacity of each country to not only produce a huge venture but also the size of its market.
News Article | March 7, 2014
In Vietnam, if you talk about gaming, you’ll obviously know VNG, the biggest gaming company in the country. And of course, everyone knows Flappy Bird by now, the Gangnam Style of mobile games. If you dig a little deeper, you’ll likely know Divmob and ME Corp, but few people in the startup world here even know GlassEgg. And yet, this is a company that has been operating in Vietnam since 1997 and has been a part of producing major racing game titles like Forza Motorsport and works with Microsoft and EA. UPDATE: _Tech In Asia_ has removed sensitive incorrect information from this article that was published earlier. We apologize for the misinformation. But GlassEgg usually doesn’t produce its own games. It’s mainly a games outsourcing outfit, which explains why it isn’t so well known in the local gaming ecosystem. We sat down with CEO, Phil Tran, and general director, Steve Reid to learn more about the company. Tran says that he originally came to Vietnam in 1995, back when CD-ROMs were still prominent. At this time, he was contracting with a company called Studio MAX, which was interested in producing educational games for kids. But then, just around that time, the internet came. All of the education stuff was now available on the internet and the CD-ROM business was broken. Tran now had over 120 animators but no business ahead of him. So he did what any sensible entrepreneur would do. In that first step in 1997, some of the older animators, engineers, and employees couldn’t handle the transition and they left. That left the some younger team members who were more flexible and eager to learn. With that, Tran slowly built up a team of 3D animators. But now they had a team without a contract. To Reid and Tran, this was a hard time, as Reid says, “the pioneer gets all the arrows in the back”. Being the pioneers in games outsourcing “isn’t exactly a source of pride” for GlassEgg. But it was with a bit of luck and a lot of persistence that the team ended up at the E3 Gaming Convention in 1997. It was there that they got to meet companies like Nintendo. Reid says: To this day, Nintendo still doesn’t outsource its games. Even at that time, much of the gaming industry clearly didn’t understand why they would need to outsource their animation and development, especially if they might have to reveal their secret sauce like game design and animation techniques. Tran says this is a huge missed opportunity for gaming companies. One of the key reasons is time. By outsourcing, a gaming company can churn out more games in a year for their titles. If you’re churning out the refreshes of your titles faster, you have the advantage of securing customers before you lose them to other, faster brands and games on the market. Games go stale, but outsourcing helps prevent that. At E3, GlassEgg got its break with a contract with a company called Infogram, which allowed the young 3D animation team to build up its expertise in 3D cars development. This break had a natural result: GlassEgg became experts in 3D car modeling. Reid says that “we can make better cars than Gran Turismo.” On top of that, they can help games like Forza Motorsport churn out new editions much faster than Gran Turismo. In other words, GlassEgg is one of the go-to studios for cars. Since that time, GlassEgg has gone on to help produce games for Microsoft, and Electronic Arts. And now, the company of 260 people, is looking at new frontiers beyond just games outsourcing. This includes game distribution, a self-produced dating app, and a new mobile app division. Like.vn, which exists on another floor from the main outsourcing units at GlassEgg, focuses mainly on games distribution. The team contracts with popular Chinese titles, especially MMORPG titles that feature characters like the Monkey King and stories based on the Three Kingdoms. According to Tran, this partly competes with VNG, which is by far the leader in the games distribution space in Vietnam. Currently, Like.vn hosts five titles. The venture is GlassEgg’s first such project in the domestic gaming market. On the product side, GlassEgg has formed a small team that built a dating app called Oakclub. The interface closely resembles Tinder, the US-made app that gets over 600 million swipes per day. Oakclub currently has over 70,000 active users across the world, with the highest concentration of users in Vietnam. Tran says that dating is still an untapped sector in Vietnam, and foreign apps like Tinder and OKcupid haven’t yet gained traction in the contry. There’s still space for apps like Oakclub and its most immediate competitor from Thailand, Paktor. In addition to games distribution and dating, GlassEgg is also building up a large mobile apps division. The company has released two games so far: Tap Pet Party and Art of Darkness. Both of these games feature artwork and 3D animation that has become GlassEgg’s specialty. Tran showed Tech In Asia around the GlassEgg facilities, pointing out that the the new mobile apps division was working on a few more titles, including a sophisticated endless runner game with beautiful 3D mecha robots.
News Article | September 23, 2014
Myanmar is a country that is still off the map for most investors and startups. It’s considered to be years behind Cambodia, which is in turn, years behind Vietnam, which is behind Thailand. And everyone is behind Indonesia in interest level. The numbers in Myanmar reveal the reason. In a population of 60 million people, below five million are online. At the same time, Myanmar looks poised to explode. Foreign telcos have successfully bid on Myanmar’s telecommunications lines and are getting their licenses in September. That’s good news for a country that sells SIM cards for over US$200. In some cases, when the junta was in power, a SIM card would cost over US$1,000. With foreign telcos coming in, the price will drop to $2. This is exactly why people are betting on Myanmar’s explosion. This is where MyChat, a product from the company MySquar, comes in. MySquar, as we’ve written before, is a content-based social network that aims to be the center of Myanmar’s social media, gaming, and now messaging world. In many ways, you could look at MySquar as an attempt to replicate the VNG model in Myanmar. It wants to develop a social platform that can deliver content (mainly games) to its users. Thus, just as VNG invests into Zalo as its main mobile platform of the future, MySquar is investing into MyChat, which it believes is the future of a Myanmar about to explode with mobile users (and leapfrog past broadband connections). See: Squar, Myanmar’s First Homegrown Social Network Wants to Beat Facebook Last month, Viber claimed it has over five million users in Myanmar. That means MyChat is up against a beast that is apparently beating Facebook as a social network – though there’s reason to distrust Viber’s numbers given that Myanmar Posts and Telecommunications reported the country’s mobile internet penetration to be 2.6 million users back in May. With fewer resources than Viber, MyChat has made a strong start. According to the company: MySquar says the app continued to see growth since the first two weeks and is optimistic about further growth as it goes up against Viber and Facebook Messenger. One little known tidbit about Myanmar: according to MySquar representatives, Myanmar is dominated by Huawei phones. And if you know Chinese companies, you’ve guessed already that Huawei doesn’t use the Google Play Store in Myanmar. For the other phones that sell in Myanmar, users are also stuck with the app stores that are native to that device. Devices are rooted for the Burmese keyboard, making it hard for novice users to get another app store. After Huawei, there’s Samsung, LG, and then Lenovo. There’s therefore no dominant app store and users must download the Android apk file to get apps that are not on specific app stores. One of the more common stores is 1mobile. For those without an app store option, there’s Zapya, which is most comonly used to transfer apps to phones. That presents an interesting predicament for MySquar, which asks you to jump over to its website to get the software for MyChat. That’s true for its two other signature products as well: MySocial, the content-based social platform, and MyStore, the third party app store with mostly games. Both of these apps are delivered via the MySquar website with an Android apk. All of this presents an interesting predicament for the MyChat app, which must market, advertise, and grow via word of mouth, Facebook, and its own MySocial platform. For reference, Facebook in Myanmar, as of 2013, had just over one million users. It is likely this number has doubled or tripled, given recent mobile usage growth (58 percent of mobile users use Facebook. MySocial competes with Facebook on the social media front and with Messenger on the MyChat front. But the apps key advantages are that they are tailored specifically to Myanmar. MyStore hosts word games that only Burmese people can play and MyChat features stickers of famous local celebrities and characters. The battle has just begun but it’s likely that MySquar’s local focus will win out in the end. After all, Facebook and Google are barely even looking at the nascent country.
News Article | July 27, 2015
HO CHI MINH CITY and HANOI, Vietnam -- I was lost. But at least it wasn't just me. My taxi driver seemed just as befuddled. I was searching for NCT Corp., one of the largest streaming music providers in Vietnam. The company's offices are in District 10, a part of Ho Chi Minh with few foreign visitors and with confusing -- at least to me -- address markers. My driver circled the area for about 20 minutes before we finally gave up and called for help. It turned out, all I needed to do was look up. NCT is located on the seventh, and top, floor of the HAGL Building, which towers over the neighborhood. NCT, a streaming music service akin to Spotify, is one of the rare tech success stories in Vietnam. It boasts 10 million active users each month and is valued at more than $20 million (By comparison, Spotify has 75 million active monthly users and is valued at $8.5 billion.). And while Vietnam's government debates the level of influence it should have on fostering startups, NCT is an example of a company that has been able to succeed on its own. NCT is also a company emblematic of where Vietnam wants to go. The country is trying to transition from serving as the world's new outsourcing hub to a center where it creates products that change the way people live, while also helping the national economy. But companies operating in Vietnam face a number of challenges, including some from their own country. Bureaucracy and corruption are common pitfalls, and it's difficult to obtain funding. While the government is attempting to bolster the efforts of startups, it's unclear whether those attempts will bear fruit. As such, many have opted to go it alone. The ability of companies -- like NCT, online gaming giant VNG and app Flappy Bird -- to thrive in Vietnam, in spite of the challenges, shows it's possible. The hope is that they won't be the only ones. "This [Vietnamese tech] market has great potential -- not one Flappy Bird, but a lot of Flappy Birds," NCT CEO Nhan The Luan said through an interpreter. When Luan started the company in 2009, it was a quasi-Napster clone, allowing people to upload and share whatever they wanted with their friends. But it soon shifted to licensing music from major labels like Universal Music Group and Sony Music and offering a streaming service called Nhac Cua Tui ("My Music" in Vietnamese). It now charges about $2 per month for users to stream music on mobile devices -- less than the $3 monthly fee for Apple Music. Each room in the office has a different look and feel. One -- with blue doors and shutters, a white picket fence and a murals of trees amid a Mediterranean-like seaside town -- gives the impression that you're outside. The "relax room" has comfy couches and stone mosaic walls that encourage you to sit and rest. The space where the licensing business resides -- NCT has exclusive rights to about 40 percent of Vietnamese music and then licenses it to other companies -- looks more like a typical business office, with large wooden cabinets. Along one wall hangs a black-and-white painting of Apple co-founder Steve Jobs. Luan's office is situated in a corner, with a large window offering an impressive view of the city below. "We want to win this market long term in Vietnam," Luan said. It's not an idle boast. NCT has flourished over the years by targeting its home market, seeing its base double from a year ago. But doing business in Vietnam can still be tough. In some ways, the Vietnamese government's policies benefit foreign companies more than those built and run in Vietnam. Under Vietnamese law, if users can leave comments on a website, a Vietnam-based company must obtain a social networking license. Getting a license can be difficult and time consuming -- and foreign companies don't need the same licenses. NCT has had to register as a social media network, but Facebook, the world's biggest social media network, has not. NCT also has a second license, for information sharing. In NCT's early days, two full-time employees dealt with the government. As NCT grew and became more established, it learned the system and figured out which officials to seek out. While it still has in-house lawyers, it no longer has full-time employees focused on navigating the Vietnamese regulatory system. That doesn't mean it's hearing from the government any less often. "We always have notice of visits from the government," Luan said as he showed me the latest letter to arrive from the ministry. "You have to show them all the reports of the operations, everything. It's a long list." "Before, [I] would lose sleep over it. Now it's part of a routine," he added. Vietnam can be a difficult place to operate for other reasons. Corruption remains a serious issue. According to a report from Transparency International, only 52 of the globe's 175 tracked countries are considered more corrupt than Vietnam. Free speech and Internet freedoms are still curtailed as well. Vietnam may not be as oppressive as China -- you can access Facebook and Google here -- but it's not "open" when compared with the liberties that US citizens and companies enjoy. If there's a government policy banning any sort of online content, Vietnam-based companies must completely shut it down. But Vietnam doesn't block YouTube or Facebook like China does, so the content is still available for Vietnamese viewers in those locations. "So where do the users go?" Luan said. "They go to where they can have it." Startups, meanwhile, run the risk of being shuttered for doing anything that offends the government. In mid-October, the Ministry of Information and Communications shut down Haivl, Vietnam's version of the popular comedic websites The Onion or 9GAG, after the media noted that it had received $1.5 million in funding from 24H Online Advertising, a high amount for a Vietnamese startup. Since 2012, the site had allowed people to upload humorous pictures, videos and articles, and it operated unimpeded by the Vietnamese federal government. Less than two weeks after the funding news came out, the Ministry of Information and Communications decided the company had "severely" breached laws on digital content on the Internet. The Hanoi offices of Topica, a startup that offers English and university courses online, bring to mind the phrase "organized chaos." About 400 men and women in their 20s and 30s are crammed into the office, sitting on metal folding chairs along narrow white tables. Dart boards with pictures of CEO Pham Minh Tuan and other executives are scattered around the offices, and the white walls are decorated with posters of quotes from famous thinkers such as Steve Jobs ("Stay hungry, stay foolish") and Thomas Edison ("I have not failed. I have found 10,000 ways that won't work"). There's even a cardboard cutout of Facebook CEO Mark Zuckerberg along with the quote, "Move fast, break things," in the space designated for the Topica Hub -- an open area in the company's offices where entrepreneurs can host their own events in the evenings. Topica came out of a Vietnamese university project funded in part by Bill Gates in 2006. In 2008, it spun off of the university and got funding from IDG Ventures Vietnam and Japan's CyberAgent Ventures. Topica has more than 21,000 students taking its university courses online, which are offered through partnerships with seven schools. "We are the leading online education company in Southeast Asia, and we plan to maintain this lead in the next five years," said Tuan, who has an MBA from NYU's Stern Business School and is a former McKinsey consultant. Topica, while a startup itself, is trying to fill a gap in the Vietnamese tech world -- the lack of an ecosystem. Along with the Topica Hub, it also operates the Topica Founder Institute, a franchisee of the US-based Founder Institute accelerator, which fosters early-stage startups into more mature businesses. The 25 graduates of the Topica accelerator over the past three years have raised $10 million in funding so far. The biggest success story is Appota, which helps mobile developers distribute applications and games. The company last year secured a second round of funding from Japanese and Singaporean investors. Topica's next project, called the EdTech Lab, will feature virtual reality devices, drones, robots and other new technologies that Vietnamese entrepreneurs can't easily access on their own. Developers, selected from a group of applicants, will have access to the lab for three to four months to create their proposals for new educational uses, like using drones to monitor test takers. In the few short years Topica has helped other startups, it has seen interest in tech soar. "I used to go to a lot of student competitions for startups and they used to be all quiet and not so much interest from the public," Tuan said. "From last year, I started seeing a big difference, like it was a music show or a celebrity show. Students are looking up to startups and they're fighting for tickets to shows like that." Wearables device maker Misfit may not have any fancy virtual reality devices or drones, but it has one key asset: a chief executive who can straddle both Vietnamese and American cultures. Sonny Vu moved to the US from Vietnam when he was six but maintained close ties to the country. So when he founded Misfit, he started it in both countries at the same time. By the end of the year, about half of Misfit's employees -- expected to total about 265 -- will be based in Vietnam, working on logistics, algorithms and other items for its wearables, including its Link app. No manufacturing is done in the country, and Misfit doesn't actually sell any products here, either. But having so many of its employees in Vietnam gives Misfit an edge, Vu said. It's able to hire from the top talent in the country -- often people returning to Vietnam from study or work abroad -- and is able to operate more cheaply than if it had a bigger presence in the US. "What we've done is optimized our hiring to be in places where we have unfair competitive advantages," Vu said. "So in Vietnam, we have an unfair advantage here. Why? Because we're just the coolest company to work for." Rockit Online, a company that teaches English and other classes over the Internet, got $500,000 last year from Silicon Valley-based venture capital firms Formation 8 and Learn Capital. It has both Vietnamese and American founders, and its CEO, Dao Thu Hien, has a long background in the US, including a stint in New York Mayor Michael Bloomberg's offices. She started her other company -- Golden Path, which helps Vietnamese students prepare for studying abroad -- in New York before returning to Vietnam in 2012. "The appetite for funding a new startup is low among the local investors," Hien said. "That means a lot of entrepreneurs will need to tap into the international market. Being a company from Vietnam, with Vietnam being not a major economy in the world, it's challenging to get the attention from investors in the US or Europe." Many of Vietnam's successful startups have founders who have foreign connections or spent time overseas. Out of 27 of the most successful tech startups from Vietnam, nearly half of them have founders who worked or studied abroad, according to a study conducted by Topica. But it's the people who've spent their entire lives in Vietnam who are increasingly starting companies such as NCT. That can make it harder to break out overseas -- if they even want to. In many cases, the new startups are focused squarely on Vietnam and Southeast Asia, with plans to move to China or the US "maybe someday." "The US is a tough market ... [and] for a foreign company to enter China, it's going to be tough," Luan said. NCT has explored the Chinese market but so far has no plans to open up shop there. And when it comes to streaming music, there isn't much room for newcomers in the US. "Our plan for the foreseeable future is still local," Luan said. Click here to read the first segment of CNET's two-part tour of startups in Vietnam.