Sea to scale up digital financial services as Q1 revenue doubles to US$1.8 billion

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SINGAPORE – Singapore technology group Sea chairman Forrest Li said the firm would scale up its fintech offerings in South-east Asia, as the firm more than doubled revenue in 2021 thanks to growth in e-commerce and entertainment.

“Digital financial services in our region are at early stages and we expect use cases to grow,” the executive told an investor call. Sea, which claimed US$3.4 billion (S$4.5 billion) in payments for its mobile wallet for the first quarter of 2021, won a digital banking licence in Singapore in December and purchased last year Indonesian lender Bank BKE ( Bank Kesejahteraan Ekonomi) to turn into a digital bank.

The New York-listed firm announced on Tuesday (May 18) it had booked a revenue of US$1.8 billion for the first quarter of 2021, up 147 per cent year on year. Its net loss widened to US$422 million from US$281 million, as the company more than doubled sales and marketing expenses. Sea’s e-commerce arm Shopee brought in US$922 million in revenue, up 250 per cent year on year, while its gaming arm Garena raked in US$781 million in revenue, up 111 per cent on the year.

Mr Li told reporters that Shopee was seeing growth in Brazil due to a nascent regional expansion. Reuters reported earlier in 2021 that the firm was launching in Mexico and was eyeing a possible wider expansion in Latin America. Analysts said they believe the jump in marketing costs was also due to Shopee’s launch of a food delivery arm segment in Indonesia this year, where it now competes with ride-hailers Grab and Gojek.

The group has seen meteoric growth on the stock markets during the coronavirus pandemic as shoppers turned to the internet, with its market cap now at US$113 billion. But it is expected to face increased competition in South-east Asia. Indonesian ride-hailing and payments firm Gojek and e-commerce leader Tokopedia announced on Monday they are merging to create a multi-billion dollar tech company called GoTo in the country’s largest-ever deal.

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