Singapore’s Sea mulls raising funds for e-commerce unit as quarterly loss triples

Photo: Sea Group website

Sea Ltd., operator of Southeast Asia’s biggest gaming platform, said it may raise funds to strengthen its balance sheet after its quarterly loss tripled on rising investments at mobile-shopping unit Shopee.

The Singapore-based gaming and e-commerce company said its net loss during the three months ended in March was $215.6 million, compared with $73.1 million a year earlier. Total revenue rose 65 percent to $155 million.

Sea, which initially modeled itself on Chinese giant Tencent Holdings Ltd., has struggled since an initial public offering in October amid widening losses. The company has invested heavily to expand beyond games into payments and e-commerce, where it faces entrenched competition from the likes of Lazada, which is controlled by Alibaba Group Holding Ltd. The stock closed Tuesday in New York at $10.64, 29 percent below their IPO price of $15.

“When you look at the longer term, there are many options for us to strengthen our balance sheet and unlock greater value for our shareholders,” Chief Strategy Officer Alan Hellawell said during a conference call. “These could include raising money at the Shopee level. We remain totally open-minded about fundraising.”

Sea raised its 2018 forecast for total adjusted revenue to be between $780 million and $820 million, up from previously estimated range of between $730 million and $770 million. The measure considers changes in deferred revenue at digital entertainment unit Garena as well as other factors.

The company’s “gross margin will remain pressured and losses will widen as it invests in growth,” Bloomberg Intelligence analysts Matthew Kanterman and Andrew Eisenson wrote in a note ahead of Sea’s earnings report.

Sea also raised its full-year forecast for e-commerce gross merchandise value. It now expects Shopee’s GMV to reach between $8.2 billion and $8.7 billion in 2018. Sea had previously forecast $7.5 billion to $8 billion.

Shopee’s first-quarter GMV was $1.9 billion, up from $648.3 million a year earlier.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.