Tapping into Cambodia’s online gaming boom

One intrepid private equity firm views the Mekong region as an arena rich for equity investors. As long as they choose wisely.

As private equity investors look to Southeast Asia in the search for the next Alibaba or Tencent, countries like Cambodia or Myanmar may not be on everybody’s radar.

But Alex Odom, chief investment officer of Phnom Penh-based Belt Road Capital Management, believes now could be the perfect time to snap up a stake in a local enterprise.

“Cambodia is one of the easiest to invest in as an outsider, compared to Myanmar or Laos for instance,” Odom said.

Belt Road Capital, with a $50 million fund in place, has deployed nearly 60% in investments in Cambodia, Vietnam, Myanmar and Southeast Asia regionally, mainly in digital services firms.

Last July it invested nearly $5 million for a 40% equity stake in the digital entertainment arm of Sabay Digital, a leading Phnom Penh-based digital entertainment and publishing group, run as separate entities since 2017.

Official data is hard to come by, but Sabay says it is the market leader for PC-based gaming in Cambodia, with an estimated market share of 70% from a survey of internet cafes and gaming centres across the country.

And through its subsidiary Sabay Osja, Belt Road Capital has a stake in the biggest gaming development studio in the country.


The global market for online and mobile game developers is expanding rapidly, growing  from $137.9 billion in 2018 to $180.1 billion by 2021, according to Newzoo, a Netherlands-based research firm specialising in games and esports analytics.

And Southeast Asia has seen a boom in popularity in online and mobile gaming over the past five years.

VNG Gaming, a Vietnamese-based developer, explored a Nasdaq listing in May last year, with Techcrunch listing it as a $1 billion company in 2016.

And Odom sees a similarity between the two countries.

“Cambodia is much smaller than Vietnam, but we have a large number of under-30s with an increasing amount of disposable income,” Odom said.

The United Nations puts Cambodia's population at 15.6 million, with 65.3% of those aged under 30.  

And internet access across the country has improved dramatically over the past few years with nearly 50% of the population logging onto the net in 2018, according to Internet World Stats.

The use of the internet and online gaming are reaching more and more people throughout the country as infrastructure improves, according to Odom.

With Sabay estimating to have cornered a 98% market share of the first-person shooter and role-playing games, the potential to increase its market penetration as new technology comes to the market is high on Belt Road Capital’s agenda.

By leveraging its knowledge of the tech space in the region, Belt Road Capital sees a great upside not only in the online and mobile gaming space, but also in newer technologies such as live streaming and tournaments offering new revenue streams and marketing channels.


To be sure, the gaming market has recently been rocked by the Chinese government’s crackdown on online use and gaming licences, which has hit global leaders such as Tencent and Alibaba’s share price last year.

But as Odom sees it, investing in tech companies in Cambodia and helping them to increase market penetration and share actually has some advantages over countries such as Myanmar and Thailand.

“Cambodia has a relatively stable political situation, which means there is a roadmap in place for doing business that will likely not be interfered with by a sudden change of government,” Odom said.

Another advantage is the large amounts of foreign direct investment that China is pouring into Cambodia, mainly in the infrastructure and real estate sectors.

As the country develops economically through such investment, opportunities for investors in smaller local companies can piggyback on the increasing wealth that is being created throughout the country.

And Odom said being locally based, with local knowledge of the market, has been key to Belt Road Capital’s investments in the region.

“Localisation has been key to our investment philosophy," he said. "Knowing the market and leveraging our network and connections is vital in this part of the world."

And with such a youthful and growing population, Odom is hoping that Sabay will become the first tech unicorn from Cambodia. 

¬ Haymarket Media Limited. All rights reserved.
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