Vantage Point: SG-based Ryde’s US IPO not for the faint-hearted

Vantage Point: SG-based Ryde’s US IPO not for the faint-hearted

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This weekly newsletter chronicles top digital themes and trends playing out in SE Asia, especially Indonesia. We will decode policy and regulatory changes affecting digital economy sectors, crunch earnings data of top players, track developments related to gig economy workers and attempt to piece together ecosystem buildouts in some of the fastest-growing, venture-backed plays. You can access the previous editions of the Vantage Point weekly posts here.

Executive Summary

  • A surprising Ryde to the US market
  • Indonesia’s two-wheeler market is hot but fragmented
  • EVs moving into heavy lifting
  • Barito Pacific warms its hands on the sustainability flame

A surprising Ryde to the US market

Ryde, a Singapore-based ride-hailing and car-pooling company with only a 2.5% market share in the city state, is seeking to raise $17 million through an IPO on the New York Stock Exchange. The company submitted its preliminary F1 prospectus to the US securities regulator on August 31.

The move comes as a surprise given its small size and market share and the fact that it is a loss-making operation. The company has a limited runway in terms of its cash burn, which suggests that there may be some urgency to raise funds.

Ryde booked a 42% revenue growth in FY2022 but growth in its ride-hailing and car-pooling business was only 7% YoY, with most of the growth coming from its Ryde+ membership and advertising revenues. While ad revenues surged 100% YoY, membership revenues grew 27x. 

The company also acquired an on-demand logistics service provider called Meili in February this year to boost its quick commerce business in Singapore, but this business remains small.

Around 75% of the company’s S$6.577 million revenue in 2022, or $4.851 million, came from ride-hailing and car-pooling, with the latter being the company’s differentiating factor, although it also generated revenues of $1.657 million from the Ryde+ membership and advertising. Membership and advertising were the key drivers for revenue growth in FY2022. 

Looking at Ryde’s headline growth, the company booked a decline in gross merchandise value of 11% YoY in FY2022 to $46.8 million. This was driven by a 29.6% decline in transaction numbers to 3.8 million during the year. 

The slower performance came despite the company spending more on driver and consumer incentives in FY2022, which grew 9.7% and 139.5% YoY, respectively.

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