Singapore's Sea files for US IPO

The offer will consist of an undisclosed number of newly issued Class A shares, according to the prospectus. Pricing for the shares has not been announced, but the company indicated it hopes to raise up to $1 billion. Existing investors, including China's Tencent Holdings - the company's largest single shareholder with a 39.7% stake - and Hillhouse Capital, which invested $230 million earlier this year, will not sell any shares in the offering.

Sea will use the majority of the capital raised to grow its business through user acquisition, content procurement and research and development, with the remainder intended for working capital and other general corporate purposes.

Founded in 2009, Sea is best known for its gaming portal Garena, which provided the company with its initial customer base and its original name. Garena capitalized on these users - in the first half of 2017 it claimed to have 40.1 million monthly active users and 12.9 million daily active users playing an average of 2.3 hours per day - to introduce online payment platform AirPay and e-commerce marketplace Shopee.

It rebranded as Sea earlier this year. The name change was intended to reflect the company's ambition to build a leading regional internet platform with Garena, AirPay and Shopee as the three legs of its strategy.

Tencent is one of the principal inspirations behind Sea's online platform strategy - along with Google and Alibaba Group - and the Chinese internet giant has supported the company since its Series A round. Sea has raised nearly $1.2 billion in total from investors including Singapore's Temasek Holdings, Malaysia's Khazanah Nasional, Ontario Teachers' Pension Plan and Global Digital Prima Ventures of Indonesia. The company has a particularly close relationship with General Atlantic, where its Group President Nick Nash formerly worked as head of the firm's Singapore office.

For the year ended December 2016, Sea recorded $346 million in revenue, up from $292 million the year before. Digital entertainment contributed the vast majority in both periods, accounting for $328 million in 2016 and $282 million in 2015. The division also turned a profit of $143 million in 2016 and $91 million in 2015, balancing out the loss experienced by other divisions including AirPay and Shopee.

Overall, Sea has recorded a net loss for the past three years, widening from $107 million in 2015 to $225 million in 2016. The company attributed the losses to investments in expanding its businesses, particularly Shopee, which was launched in 2015.

Sea claims Shopee was the best-performing e-commerce platform in Southeast Asia in the first half of 2017 by gross merchandise volume and total orders. The Shopee app has 9.8 million monthly active users and 3.4 million daily active users, who spend an average of 22 minutes per day on the platform. Currently, there are about 74 million active product listings from 1.6 million monthly active sellers.

AirPay claimed to be the region's top digital payments provider for the first half of 2017 by e-wallet gross transaction volume, with $472.4 million processed across 87.1 million transactions and 87.1 million monthly active users. Customers can top up their wallets through AirPay counters operating in Thailand, Vietnam, Indonesia and the Philippines and can also make payments through the AirPay app in Thailand, Vietnam, and Taiwan.

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• Topics
• Southeast Asia
• Consumer
• Technology
• Media
• IPO
• Singapore
• Tencent
• General Atlantic
• Temasek Holdings
• Exit