Singapore tech startups shift gear to tap region’s exploding e-commerce

On Monday, three companies unveiled major plans to deepen their presence across South-east Asia – three months after Grab announced its US$700-million investment in Indonesia to support the country’s goal of becoming the region’s largest digital economy by 2020.

Garena, a consumer Internet platform and South-east Asia’s largest Internet startup, said it has raised US$550 million in new funding, the bulk of which will be used to expand its e-commerce arm Shopee, with a focus on “key markets such as Indonesia”.

Shopee, an app that lets users buy and sell items, is said to have more than doubled in size in the past nine months, with annualised gross merchandise value of over US$3 billion.

Asked why Indonesia, a company spokesman cited research by Frost & Sullivan: Total e-commerce spending in Greater South-east Asia, which includes Taiwan, in which Shopee operates in, will more than triple from US$23 billion in 2016 to US$82.8 billion by 2021.

He added: “And within that, Indonesia will grow from US$2.3 billion to US$22.4 billion, a compounded rate of growth of almost 60 per cent a year, or twice the overall region’s growth rate. This scale and rapid expected growth collectively make Indonesia a high priority for Shopee and Sea more broadly.”

Garena on Monday rebranded as “Sea”, which signals its regional ambitions. SEA, for South-east Asia, reflects the company’s leadership across three platforms: digital entertainment (Garena), e-commerce (Shopee) and digital financial services (AirPay).

Sea founder Forrest Li said: “We cherish these three brands, and are now embracing an overall identity for our entire company.”

Investors in Sea’s latest funding round hail from various countries. They include existing investor GDP Venture (Indonesia), and new investors JG Summit Holdings (the Philippines), Farallon Capital Management (the US), Hillhouse Capital (China), Cathay Financial Holding (Taiwan), and President International Development Corporation (Taiwan).

Sea did not disclose its valuation after the latest funding round. The company was reportedly valued at some US$3.75 billion last year after raising US$170 million in a Series D round led by Khazanah Nasional, which made it South-east Asia’s largest Internet startup.

It has appointed three new senior advisers: former Singapore foreign minister George Yeo; former Indonesia trade minister Mari Pangestu; and Abraaj Group managing director Pandu Sjahrir.

Meanwhile, Lunch Actually Group has acquired Setipe (one of Indonesia’s largest online dating platforms) to extend its presence in South-east Asia. The buyout sum is “in the seven digits”, BT has learnt.

With this acquisition, Setipe will join Lunch Actually Group’s stable of online dating brands which include Lunch Actually, LunchClick and esync. Setipe founder Razi Thalib will remain as chief executive officer (CEO) of Setipe, and head up Lunch Actually Group’s Indonesian operations.

Violet Lim, CEO of Lunch Actually Group, told BT: “With a 240 million population and a fast-growing middle class, Indonesia is definitely a key part of our growth strategy should we want to dominate South-east Asia. There is also a lack of trusted offline matchmaking services for serious singles in Indonesia.”

She added that while Lunch Actually Group already has a strong presence in many other South-east Asian countries, the group’s goal in Indonesia is to create one million “happy marriages”, and quadruple its revenues by the end of this year.

Finally, Anchanto, a company that provides online selling and e-commerce logistics solutions to enterprises, said on Monday it has bagged investments from “two of the largest players in the Asian e-commerce domain”, namely omnichannel retailer Luxasia Group and e-commerce enabler transcosmos.

The combined investment amount was undisclosed, but BT understands that it is “in the millions”.

Anchanto said that the latest money will be used to rapidly expand across the Asia-Pacific, and grow its operations in Malaysia, Thailand, The Philippines, Vietnam and India.

The company added that it plans to help retailers in the region take their business from brick-and-mortar to the online world of e-commerce, and traditional logistics players transform their businesses and start catering to online sellers.

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