The competition is heating up.
After picking up an impressive US$550 million in funding to better finance its plans in Indonesia, Singapore’s biggest tech startup Garena Interactive is rebranding itself as Sea Ltd. to better reflect its widened expansion plans for the region (get it, because Sea is an acronym for Southeast Asia. ‘A’ for effort, Garena). The rebranding exercise and the company’s latest round of funding come on the heels of reports that the company has been mulling over an IPO with Goldman Sachs, with an estimated potential price tag of US$1 billion.
The new lineup of investors for this round of funding include names like GDP Venture, which is helmed by Martin Hartono whose father is the richest man in Indonesia, and JG Summit Holdings, which was established by Philippine billionaire John Gokongwei. They join previous investors such as China’s Tencent Holdings, Asia’s largest internet company, and American equity firm General Atlantic.
How It All Started
In 2016, Sea held two rounds of funding – once in March where it raised US$170 million, and again in September for an undisclosed amount. Notably, its March 2016 funding gave the company a valuation of $3.75 billion, making the most valuable tech startup in the region, a figure that has risen tremendously after two more successful rounds of funding.
As the competition in Southeast Asia’s e-commerce market heats up – with Alibaba buying up Lazada in 2016, and Amazon’s long-awaited entry into the region – Sea’s new infusion of capital will give the company a chance to grow Shopee, its consumer-to-consumer platform, in Indonesia. According to Sea, Shopee’s annualized gross merchandise value has increased two-fold over past nine months to exceed $3 billion.
With Tencent’s investment in Sea, analysts are foreseeing a proxy battle in Indonesia between Shopee and Lazada, which is owned by Alibaba and one of Tencent’s biggest rivals in China. To further strengthen its push into Indonesia, Sea has appointed George Yeo, Singapore’s former foreign minister, Mari Pangestu, formerly the Indonesian trade minister, and Pandu Sjahrir, a director of Indonesian coal producer PT Toba Bara Sejahtra, as advisors.
