SE Asia's Sea hikes IPO price, raises $884m
Singapore-headquartered mobile internet and gaming platform Sea has raised $884 million in its US IPO after increasing the offer price and size.
The company sold 59 million shares at $15 each, according to a filing, up from its initial proposal of 57.4 million shares at $14 each. China’s Tencent Holdings, a major backer of Sea, bought 3.3 million shares at the IPO price.
In the first day of trading on the New York Stock Exchange on October 20, the stock opened around $17 before falling to $14.11 within the first hour, but rose throughout the day to close at $16.26.
Sea was founded in 2009 as Garena, which is now the name of its online gaming portal. The company plans to build a leading regional internet platform based on Garena, online payment platform AirPay, and e-commerce marketplace Shopee. It will use most of the proceeds from the IPO to grow its business through user acquisition, content procurement and research and development.
Tencent has been a backer of Sea 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.
Sea recorded $346 million in revenue for the year ended December 2016, up from $292 million the year before. The company has recorded a net loss for the past three years, widening from $107 million in 2015 to $225 million in 2016. So far digital entertainment is Sea’s only profitable division, accounting for $328 million of the company’s revenue in 2016 and balancing out the losses experienced by AirPay and Shopee.
The company attributes its overall net loss to investments in expanding the newer businesses. It 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, with 9.8 million monthly active users and 3.4 million daily active users. AirPay claimed to be the region’s top digital payments provider for the first half of 2017 by e-wallet gross transaction volume, processing $472.4 million across 87.1 million transactions.
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