Today has seen news that Garena, the eight year old startup that is renowned as Southeast Asia’s most valuable has landed a host of new investors in its latest funding round, including some of Southeast Asia’s richest families. These include JG Summit Holdings Inc which was founded by John Gokongwei, the Philippine billionaire and GDP Venture, which is led by the son of Indonesia’s richest person Martin Hartono. As part of the funding round that saw it raise over $550 million, the company will rebrand as Sea Ltd.
The news comes at an exciting time for Southeast Asian ecommerce, with competition rapidly intensifying, especially in countries such as Indonesia which has been a largely untapped market until now. Garena’s (now Sea’s) latest round of funding has been seen by many commentators as a bold move to state its intentions in the market place in the face of increasing competition. This comes in many forms but has recently been intensified by Alibaba Group Holding Ltd expanding its online marketplace by taking control of Lazada Group SA whilst JD.com Inc is rumoured to be investing in Tokopedia in a bid to boost its business in Indonesia, Southeast Asia’s largest economy.
Now branded Sea, company’s roots go back to 2009 when it was founded by Chinese-born Forrest Li in Singapore. The name Sea was chosen as its new name not through any nautical connections but because ot stands for Southeast Asia. The new brand will inside the online games brand Garena, digital payments service Airplay and ecommerce brand Shoppee. It is thought that Goldman Sachs Group Inc have been instructed to prepare for an initial public offering, thought to be in the US, that commentators think could fetch over $1 billion.
When asked for a comment, Sea kindly declined although it has announced the appointment of three new directors, including former Indonesian trade minister Mari Pangestu.
The Importance Of This News To Garena (Now Sea)
- With a valuation of $3.75 billion, Garena has long been the most valuable startup in Southeast Asia. As it stands, after the news today, it is unclear just how this will affect the valuation.
- Whilst Garena started off as a company specialising in online gaming, it has now diversified and now it generates review from a number of different channels including social, ecommerce, payments and digital content. In fact, it now has its own shopping app called Shoppee that is popular across the whole of Southeast Asia.
- Whilst Garena has enjoyed a leading status in Southeast Asia, other tech firms such as Go-Jek and Grab have now began catching up with Garena. Both Go-Jek and Grab started out by providing on-demand services and rides but have now, like Garena, diversified into online shopping and digital payments. They too have both recently secured investment like Garena, with G-Jek raising $1.2 billion in a round led by Tencent with Grab also securing investment that is said to have taken it above $3 billion.