In 2020, Singapore gave birth to its first tech unicorn—Sea Limited, the company behind recognisable businesses such as gaming entertainment company Garena, ecommerce giant Shopee, and digital bank MariBank.
The tech conglomerate has experienced its fair share of highs and lows, and Forrest Li, Chairman and CEO of SEA Limited, took to the stage at 2024’s Singapore Fintech Festival (SFF) last week to share his insights on how the company scaled up and overcame its obstacles since its inception in 2009.
Fighting through the turbulence
In March this year, Sea Limited reported its first profitable year since its IPO in 2017, with a net income of about US$162.7 million and earned revenue of US$13.1 billion in 2023—a sharp turnaround from its US$1.7 billion in 2022.
CNA’s Syahida Othman, the moderator for the fireside chat with Li, described the tech industry as cutthroat as the sector saw a series of layoffs, salary freezes, widening losses, and slower revenue growth.
Li responded to Othman by saying that “it has not been easy” due to the growing geopolitical tensions and the aftermath of the COVID-19 pandemic.
While the pandemic pushed many consumers online, its unpredictable nature made it difficult to make concrete plans and allocate resources. He added that, on top of that, capital became extremely expensive after the Federal Reserve “pushed to increase the interest rate”.
As a result, businesses suddenly had to shift from an abundant mentality to a capital-scarce mentality, where investors have become more conservative in funding. Li recalled having to “take a step back” and needing to “slow down a bit” to focus on ensuring that the business was robust and healthy financially.
I think, looking back, what we have done well is we took action very quickly. So we know how the world is different, whatever kind of the way we work in the past probably is not the case anymore, we need to do things in a fresh perspective.
But we never lose our face in the business, and at the end of the day, we always believe the profitability of the business is just a proxy of the value we created, and it’s not value you only created for yourself [and] the company, but for the whole society, for all your customers and for all your suppliers, and in our situation, is all the gamers, is everybody who shop and sell on Shopee.
Forrest Li, chairman and CEO of Sea Limited
Managing different businesses and customising solutions
Sea has businesses across industries, with their fintech arms being their most nascent. Li adds that the industry presents exciting growth opportunities to touch underserved markets.
In the case of their digital banking arm, MariBank, it started as an avenue to increase financial inclusivity in the Southeast Asian region. He pointed out that in the traditional banking model, one is presented with “better” investment options and finds it more accessible to acquire loans from a bank.
However, this is not the case with most people, especially small businesses, who need working capital loans and might not have the conventional pay speed data or the required credit score.
At this moment, we give out the credit loans to consumers, [where] there’s more than 10 million people [in] Indonesia [who] have access and borrowed money from us. And the average credit loan size they borrow is US$100 to US$200, so it’s a very, very small amount, but this can make a big difference in their life.
Forrest Li, Chairman and CEO of Sea Limited
In Singapore, he added that while most have access to credit and possess multiple credit cards, they are unsure of where to start in their investment journeys despite having a strong interest.
This led the company to launch Mari Invest in 2023, which, according to Li, has taken off and has become one of the “largest cash alternative investment products in Singapore”.
What’s next for Sea?
When asked about his plans for Sea, Li expressed the company’s commitment to increasing financial inclusivity in its offerings.
He pointed out that despite the company putting “a lot of relentless, good effort” into making its products and services more accessible, the ecommerce penetration rate is “still pretty low” in Southeast Asia, including Singapore.
This emphasises that there is still a lot of room to grow, and for Li, the way to do this is to make their products easier and cheaper to access and use.
He expressed his ambition to grow their customer base from millions to billions and is “excited” about new technological breakthroughs, specifically artificial intelligence (AI), cryptocurrencies, and blockchain technologies.
I think in the next 10, 15, years, all these new frontier technology will bring new services and value to serve people better, to make people’s better life better. And for us, we want to contribute [and] participate in those technological developments, but we also want to be more focused on the application and how to use these technologies, and to change it to [become] the daily product and the services [that] people can benefit from.
Forrest Li, Chairman and CEO of Sea Limited
Featured Image Credit: Vulcan Post