Singapore's Sea to raise up to $800m in US IPO

According to a filing, Sea will offer 49.7 million Class A shares, which could rise to 57.4 million shares if the overallotment option is exercised in full. Pricing has been set at $12-14. Current backers, including China’s Tencent Holdings – the 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 filed its initial prospectus last month, following a rebranding earlier this year. The company plans to 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 as Garena, Sea hopes to build a leading regional internet platform modeled on Tencent, Google and Alibaba Group. Its strategy rests on three legs: gaming portal Garena; online payment platform AirPay; and e-commerce marketplace Shopee. The name change was intended to reflect the equal importance of the three divisions.

Tencent has been a backer of Garena since its Series A round. Additional investors include Singapore’s Temasek Holdings, Malaysia’s Khazanah Nasional, Ontario Teachers’ Pension Plan and Global Digital Prima Ventures of Indonesia. The company also has a 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, 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. 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 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
• Technology
• IPO
• Consumer
• Media
• Singapore
• TMT
• Tencent
• General Atlantic
• Temasek Holdings
• Exit