Are fintech and online businesses better businesses?

[Scrooball (clone)]

Easily the smart business to take to IPO and let it bleed. Investors will always imagine that it’s easy for profits to multiply in the e-commerce space

 

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Robinhood lays off 23% of staff, blaming crypto meltdown and inflation​

The announcement followed closely on the heels of cuts in April, when Robinhood laid off 340 workers. PHOTO: REUTERS


AUG 3, 2022

NEW YORK (NYTIMES) - Robinhood, the trading app that popularised one-click trading and helped fuel last year's meme stock frenzy, said on Tuesday (Aug 2) that it was laying off about 23 per cent of its workforce.
Chief executive Vlad Tenev said in a blog post that the layoffs would affect employees across the company, especially those in operations, marketing and programme management roles.
The announcement followed closely on the heels of cuts in April, when Robinhood laid off 340 workers, or about 9 per cent of its employees at the time. Since then, Mr Tenev wrote, further worsening of the economy, including inflation and the crash of the crypto market, has "reduced customer trading activity and assets under custody".
The price of Bitcoin has fallen by more than half this year, to about US$23,000 per coin. The cryptocurrency rose as high as US$66,000 in late last year.
The layoffs come as part of a wave of job cuts at tech companies, including some cryptocurrency firms. In June, cryptocurrency exchanges including Coinbase and Gemini announced that they were laying off employees. Last week, Shopify, an online marketplace, announced it was cutting 10 per cent of its 10,000 employees.
In his memo on Tuesday, Mr Tenev said Robinhood misjudged the economy and trading activity.
"As CEO, I approved and took responsibility for our ambitious staffing trajectory - this is on me," he wrote.

The company also released its second-quarter results on Tuesday, reporting that its monthly count of active users declined to 14 million in June, a decrease of 1.9 million.
The turbulence represents a major comedown for Robinhood, which became a key player in the meme stock craze early last year, when investors banded together to drive up the stocks of companies including video game retailer GameStop and movie theatre chain AMC.
On Jan 27 last year, GameStop shares closed up nearly 1,800 per cent from a few weeks before, a record.
Then, Robinhood restricted trading in some meme stocks. The restrictions led the stocks to plunge. Lawsuits, a US Securities and Exchange Commission investigation and congressional hearings soon followed.
Robinhood's stock price soared during the meme stock trading.
On Aug 7 last year, the company was worth US$46 billion (S$63.6 billion), up about 60 per cent from its valuation a week before. But its stock has plunged 50 per cent since the beginning of the year as it continues to deal with the fallout.
The overall value of the cryptocurrency market is down to about US$1 trillion from US$3 trillion last year, when enthusiasm for crypto trading peaked and the price of Bitcoin reached a new high.
Robinhood has been working to build out its crypto arm this year, listing new coins and rolling out a crypto wallet product.
"The one thing that I liked the least about Robinhood is their crypto exposure," said Mizuho senior analyst Dan Dolev. "Anything that has no intrinsic value is always prone to problems."
Also on Tuesday, the New York State Department of Financial Services announced it was fining Robinhood's crypto operation US$30 million over violations of its anti-money-laundering and cyber-security regulations.

Robinhood does not charge brokerage for stock purchase so where do they make the money?profit sharing?

 

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Robinhood does not charge brokerage for stock purchase so where do they make the money?profit sharing?

I briefly read some time ago that they make money from the customers' float i.e. the customers' monies sitting in its brokerage accounts. Imagine putting USD500 million of customers' monies in overnight deposits earning 0.1%. That is $500,000 free money in 1 night and $182 million in 1 year.

 

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Once South-east Asia's most valuable start-up, Grab falls $18 billion behind GoTo​

Grab still counts Singapore as its largest market even as it tries to expand in countries including Indonesia, South-east Asia's largest economy. PHOTO: ST FILE

Aug 25, 2022

SINGAPORE (BLOOMBERG) - Singapore's Grab Holdings, once South-east Asia's most valuable start-up, is faltering behind GoTo Group in the stock markets as it fights to gain ground on its Indonesian ride-hailing rival's home turf.
The unprofitable companies are both struggling to convince investors of their moneymaking potential after staging their stock market debuts in recent months. Yet GoTo has fallen less than its competitor and its market value of about US$26 billion (S$36 billion) is now twice that of its Singaporean peer. The companies are each set to report quarterly earnings.
Grab and GoTo have been locked in an expensive battle for dominance over the past several years. Grab still counts Singapore as its largest market even as it tries to expand in countries including Indonesia, South-east Asia's largest economy. GoTo is enjoying a leadership position in its home nation of more than 270 million people whose mobile-savvy consumers are shopping on its online-retail platform Tokopedia and ordering rides and food via its Gojek's app.
The growth potential of Indonesia has helped GoTo outperform Grab, which became a publicly traded company through a merger with Brad Gerstner's Altimeter Growth Corp in December. GoTo has lost about 3 per cent since its initial public offering in Jakarta in April, while Grab is down more than 60 per cent since combining with the US blank-cheque company.
"GoTo's advantage as a homegrown Indonesian brand and its synergy with Tokopedia may let the country's biggest tech firm defend food-delivery market share from Grab, the category's leader in South-east Asia, and improve profitability," Mr Nathan Naidu, an analyst at Bloomberg Intelligence, said in a July 20 report.
While Gojek has a strong grasp of the crucial Indonesia market, Grab has made inroads in food delivery. Grab had 49 per cent of the Indonesian food delivery market last year, compared with GoTo’s 43 per cent, according to Momentum Works.
Grab is scheduled to report second-quarter results before US markets open on Thursday, while GoTo is set to release results on Aug 30.

 

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Grab’s sales beat estimates, but falls behind GoTo in market value​

Grab still counts Singapore as its largest market even as it tries to expand in countries including Indonesia, South-east Asia's largest economy. PHOTO: ST FILE
UPDATED

Aug 26, 2022

SINGAPORE (BLOOMBERG) - Grab Holdings reported a better-than-expected 79 per cent revenue increase, buoyed by resilient demand from consumers who continued to hail rides and order food despite rising inflation.
Revenue climbed to US$321 million in the second quarter, the Singapore-based company said in a statement Thursday. That beat the US$273.1 million average of analysts’ estimates compiled by Bloomberg.
Grab’s net loss narrowed to about US$547 million as it fights to reduce cash burn after spending several years locked in an expensive battle for dominance in the region.
Grab, led by Anthony Tan, has struggled since it went public via a merger with a US blank-check company last year.
Its shares have lost more than 60 per cent of their value since then as losses piled up during pandemic-era lockdowns and money-losing companies have fallen out of favor with investors.
Now Mr Tan must navigate through an era of rising inflation that could dampen demand just as Grab is trying to emerge from the Covid challenges.
Grab said revenue this year is expected to be US$1.25 billion to US$1.3 billion, compared with its previous forecast of US$1.2 billion to US$1.3 billion.


The company said its gross merchandise value will expand 21 per cent to 25 per cent this year, compared with 30 per cent to 35 per cent it had projected previously.
Once South-east Asia’s most valuable start-up, Grab is faltering behind GoTo Group in the stock markets as it fights to gain ground on its Indonesian ride-hailing rival’s home turf.
The unprofitable companies are both struggling to convince investors of their moneymaking potential after staging their stock market debuts in recent months.

Yet GoTo has fallen less than its competitor and its market value of about US$26 billion is now twice that of its Singaporean peer.
Grab and GoTo have been locked in an expensive battle for dominance over the past several years.
Grab still counts Singapore as its largest market even as it tries to expand in countries including Indonesia, South-east Asia’s largest economy.
GoTo is enjoying a leadership position in its home nation of more than 270 million people whose mobile-savvy consumers are shopping on its online-retail platform Tokopedia and ordering rides and food via its Gojek app.
The growth potential of Indonesia has helped GoTo outperform Grab, which became a publicly traded company through a merger with Brad Gerstner’s Altimeter Growth in December. GoTo has lost about 3 per cent since its initial public offering in Jakarta in April, while Grab is down more than 60 per cent since combining with the US blank-cheque company.
While Gojek has a strong grasp of the crucial Indonesia market, Grab has made inroads in food delivery.
Grab had 49 per cent of the Indonesian food delivery market last year, compared with GoTo’s 43 per cent, according to Momentum Works.
GoTo is set to release results on Aug 30.

 

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PropertyGuru quarterly earnings back in black for first time since US listing​

PropertyGuru reported that net income for the second quarter of FY2022 ended June 30 came in at $3.8 million. ST PHOTO: DIOS VINCOY JR
Janice Lim

Aug 26, 2022

SINGAPORE (THE BUSINESS TIMES) - PropertyGuru is the first among Singapore-based start-ups to turn profitable following its listing in the United States.
For the first time since its listing in March, the property portal reported on Thursday (Aug 25) that its net income for the second quarter of FY2022 ended June 30 had turned positive, coming in at $3.8 million.
This is a reversal from a net loss of $139.8 million in the same quarter a year ago.
PropertyGuru's revenue increased 44.3 per cent year on year to $33 million from $23 million over the same time period. For the first half of FY2022, revenue came in at $61.3 million.
The proptech company said in a statement that this was balanced with growth across all markets and business segments.
"Investments made over the last 2 years are gaining traction now, as real estate markets emerge from the pandemic-induced slowdown," it said.
Its Malaysia marketplace segment recorded the highest revenue growth, increasing from $2.2 million to $5.9 million, a jump of 169.7 per cent.


Revenue for its Singapore marketplace increased by 30.6 per cent to $17.3 million, from $13.2 million over the same period.
Its adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) was $3 million in the second quarter of FY2022, a reversal from a loss of $2 million a year ago.
Its earnings per share, attributable to shareholders of the New York-listed company, is also in the black at 2 cents per share, compared to a loss of U$2.48 per cent share over a year ago.
PropertyGuru maintains its full-year outlook of approximately 44 per cent revenue growth, driven by the strong start to 2022 and growth across all core markets.
It expects to return to full-year positive adjusted Ebitda, as it realises the full benefits of its pandemic-period investments. However, it also cautioned that this outlook could be hit by uncertainty around rising inflation and interest rates, government policy and fiscal intervention, political instability and other macro factors.
Hari Krishnan, the company's chief executive officer and managing director, said that its strategy of increasing its customer value proposition is proving effective, as returns on investments made over the past few years have begun to come in.
"Going forward, we expect to capitalise on both organic and inorganic opportunities to further expand our world-class solutions to customers. Even with our growing business strength, we remain vigilant around potential market challenges from rising inflation and interest rates and other global macro headwinds," he added.
PropertyGuru's shares closed up 2.6 per cent or 12 US cents at US$4.80 on Thursday in New York, after its earnings announcement.

 

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Dot's prediction: Shopee is going to close

Shopee catches would-be employees off guard after it withdraws some job offers​

A social media user posted about being informed upon landing in Singapore that a Shopee job offer had been withdrawn. PHOTO: ST FILE

Rosalind Ang

Sep 1, 2022

SINGAPORE - E-commerce platform Shopee has rescinded a number of job offers for positions at its headquarters in Singapore, including for someone who had already flown here to take up a new role.
According to tech media company PingWest, a user going by the pseudonym "Linge" posted on Chinese workplace social app Maimai last Friday, saying the user had received a phone call upon landing in Singapore that the job offer had been withdrawn.
"Talents are not commodities, they are a core asset of the company. If a large company cannot even meet the needs of employees, how can we talk about future development for the company?" the user wrote in Mandarin.
When contacted by The Straits Times, a spokesman for Shopee said: "Due to adjustments to hiring plans on some tech teams, a number of roles at Shopee are no longer available. We are working closely to support those affected."
Under Singapore's Employment Act, a contract of service defines the employer-employee relationship, including the terms and conditions of employment, according to the Ministry of Manpower (MOM) website.
The contract of service comes into effect when the new recruit turns up for work on the appointed starting date.
ST has contacted MOM for further comment.


A source with knowledge of the matter said Shopee will be offering compensation of one month's salary to those affected.
It will also be covering all travel expenses such as flights, hotels and quarantine-related costs for a small number of individuals who travelled from overseas, said the source.
The source added that out of the few dozens of job offers rescinded by the company, a handful involved international transfers, while the vast majority are local hires in Singapore and China.
This comes after parent company Sea said during its second-quarter results briefing on Aug 16 that it will suspend guidance for Shopee to further focus on managing costs for long-term strength and profitability.
Sea reported a widening of its second-quarter losses year on year, driven by higher cost of revenue in the e-commerce segment. Shopee accounts for about 60 per cent of Sea's revenue.
There is now pressure on tech companies to focus on generating revenue growth and conserve cash, said Mr Nirgunan Tiruchelvam, head of consumer sector equity research at capital market intelligence firm Tellimer.
"During the pandemic, lots of tech companies could raise revenue growth and funding as technology use boomed. The growth trajectory of the tech industry has slowed down as the pandemic wanes, leading to reduced tech usage - Zoom (video-conferencing platform) is being used less and fewer people order food online," he said.

 

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Sea cuts some Garena unit jobs, shuts projects: Sources​

Employees were told staff numbers at its gaming live stream business and its development arm would be cut, sources said. PHOTO: GARENA

Sep 2, 2022

HONG KONG/SINGAPORE - Gaming and e-commerce company Sea is putting the brakes on its game live streaming platform and shutting projects at its development unit after reporting an almost US$1 billion (S$1.4 billion) quarterly loss, two sources familiar with the matter told Reuters.
Employees were told staff numbers at its gaming live stream business and its development arm would be cut, sources said.
Workers at Booyah!, a gaming live stream and community app, which is part of Sea's gaming unit Garena, were told they would be let go and that the app would no longer be updated, the sources said. One source said it meant making 30 to 40 people redundant.
Sea Labs, the tech conglomerate's development arm, was shutting some of its biggest experimental projects and cutting staff, including blockchain and public cloud projects, the source said.
A third person with knowledge of the matter confirmed that Sea had shut some major projects and laid off "dozens of people", saying it was related to Sea's plan to boost profitability.
A spokesman for Sea told Reuters the company had "made some changes to improve efficiency in (its) operations that impact a number of roles", saying it would focus on the "long-term strength" of its ecosystem.
The spokesman declined to say how many jobs were affected.


After a rally in its fortunes during the pandemic, Sea has suffered setbacks that have led to more than a 72 per cent drop in its share price so far this year.
Its e-commerce platform Shopee rescinded a number of job offers for positions at its headquarters in Singapore, including for someone who had already flown here to take up a new role, The Straits Times reported on Thursday.
Sea cut jobs at Shopee in June, not just in South-east Asia but also at its Mexico and Latin American operations, according to media reports.
The New York-listed tech firm last month posted a wider-than-expected loss for the second quarter and withdrew its e-commerce forecast for the year, sending its shares plunging 14 per cent.
In March, Sea warned that Garena was taking a hit from government bans in India.
Quarterly paying users for Garena dropped 39 per cent in the quarter. REUTERS

 

[50000]

I briefly read some time ago that they make money from the customers' float i.e. the customers' monies sitting in its brokerage accounts. Imagine putting USD500 million of customers' monies in overnight deposits earning 0.1%. That is $500,000 free money in 1 night and $182 million in 1 year.

Do banks still offer overnight loans? I was told no more.....

 

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Sea's Shopee shuts operations in Argentina, Chile, Colombia, Mexico: Sources​

Shopee confirmed it would operate a cross-border model in Chile, Colombia and Mexico, and close in Argentina. PHOTO: REUTERS

Sep 9, 2022

SINGAPORE - Sea's e-commerce arm told employees on Thursday it was shutting local operations in Chile, Colombia and Mexico, and leaving Argentina entirely, according to three sources with direct knowledge of the matter and an internal e-mail.
The Singapore-based company will maintain cross-border operations in the first three markets but will cut the majority of its teams in the countries, affecting dozens of employees, the sources said. Brazil, in which Shopee has become a dominant player, will not be affected.
In an internal e-mail seen by Reuters, Shopee chief executive Chris Feng wrote to employees that "in light of the current elevated macro uncertainty", the company needed to "focus resources on core operations" and had decided to concentrate on a cross-border model in Mexico, Colombia and Chile.
Shopee confirmed later in a statement to Reuters that it would operate a "cross-border model in Chile, Colombia and Mexico, and close in Argentina".
Latin America is Sea’s most important region after South-east Asia, accounting for almost 19 per cent of its revenue in 2021. Shopee expanded into Mexico, Chile and Colombia just a year ago - two years after going into Brazil - banking on the region’s rising population of young, mobile-savvy users.
Shopee’s second-quarter revenue in Brazil, its core market in Latin America, rose more than 270 per cent from a year earlier. The service also ranked first by average monthly active users in the shopping category in Brazil, Sea said in its quarterly earnings report, citing analysis from data.ai.
Sea’s pullback from Latin America was unsurprising, said Mr Zennon Kapron, managing director of Singapore-based consulting firm Kapronasia. “We’re clearly in a ‘risk-off’ environment with rising interest rates and increasing uncertainty around the direction of the global economy.”

Sea faces increasing pressure to cut costs after growth in its e-commerce business slowed from pandemic-era highs. Consumers are pulling back on spending online as rising interest rates and prices weigh on the economy.
Sea's market value soared to more than US$200 billion (S$280 billion) last October as its gaming and e-commerce units surged in popularity during the pandemic, but its shares have tumbled since then and are now worth just US$27 billion.
The company's leadership has given internal directives to Shopee managers to achieve profitability in its key markets in South-east Asia by 2023, a separate source told Reuters.
"Shopee has been around for seven to eight years... so now they have to focus their effort on turning a profit at its core markets," said lead analyst Ke Yan at Singapore-based DZT Research.
Shopee announced in March it was shutting down nascent operations in India and France.
In June, Shopee cut jobs across its e-commerce and food delivery divisions, according to sources, both in South-east Asia and its Latin American operations. Shopee has also rescinded dozens of job offers in the past two weeks, including for positions at its headquarters in Singapore.
Staff at Sea's gaming live-stream app, which is part of Sea's gaming unit Garena, were told they would be let go, separate sources told Reuters, adding that projects at Sea's development unit were also shut down. REUTERS, BLOOMBERG

 

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No pay for Sea CEO, top management amid deepening cash flow woes​

In an internal memo sent to staff, Sea CEO Forrest Li said top management will forgo their salaries and tighten company expense policies. PHOTO: THE BUSINESS TIMES

Sep 15, 2022

SINGAPORE - Sea Limited's top management will forgo their salaries and tighten company expense policies, as the Singapore gaming and e-commerce giant tries to shield itself from the economic slowdown threatening tech companies.
Chief executive Forrest Li said in an internal memo sent to staff on Thursday that the leadership team has decided that it will not take any cash compensation "until the company reaches self-sufficiency".
This comes days after Sea shut down operations in some markets and trimmed staff across its divisions.
"We can now see that this is not a quickly passing storm: These negative conditions will likely persist into the medium term," he added.
In his 1000-word missive, seen by Bloomberg News, the billionaire addressed head-on the struggle for Sea in an era of rising interest rates, accelerating inflation and a volatile market.
The company has lost about US$170 billion (S$239 billion) of market value since an October high on questions about its money-making prospects and a global decline in technology stocks.
"With investors fleeing for 'safe haven' investments, we do not anticipate being able to raise funds in the market," Mr Li said, reiterating that the company's primary objective for the next 12 to 18 months is to achieve positive cash flow as soon as possible.

The company will cap business travel to economy class flight fares, with travel meal expenses limited to US$30 a day. It will also curb spending on hotel stays for business trips to US$150 a night, and cull reimbursement for meals and entertainment bills.
"The only way for us to free ourselves from relying on external capital is to become self-sufficient, generating enough cash for all our own needs and projects," Mr Li said.
Sea is facing increasing pressure to simultaneously grow and control costs. Consumers are pulling back on spending online as rising interest rates and prices weigh on the economy, while investors are becoming less willing to bankroll growth without profits.


After grappling with a string of extraordinary setbacks this year - including India's abrupt ban of its most popular mobile game - the company is looking to take significant steps to move from unbridled growth to profitability.
The company has said it expects gaming arm Garena to post its first decline in bookings this year, and last month, it withdrew its 2022 e-commerce forecast.

Sea is facing increasing pressure to simultaneously grow and control costs. PHOTO: SEA LIMITED
Last week, Sea's e-commerce unit said it is leaving Argentina and closing most of its operations in Chile, Colombia and Mexico, retreating from much of Latin America to focus on profitability over growth.
Shopee will close offices in Chile and Colombia and maintain just a small local presence in Mexico to support regional markets, according to a person with knowledge of the matter and an internal e-mail seen by Bloomberg News.
The decision should affect a few hundred jobs, said the person, who asked not to be named as the matter was private.
Shopee CEO Chris Feng cited "elevated macro uncertainty" for the pull-out.
"This means focusing our resources on our core operations," he said in an internal e-mail.
Shopee had also pulled out of France, Spain and India months after launching operations in those markets. BLOOMBERG

 

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Sea plans to fire 3% of Shopee Indonesia staff as regional job cuts begin​

The Singapore-based company will begin notifying affected staff on Monday at its cash-burning e-commerce arm Shopee. PHOTO: REUTERS


SEP 19, 2022

SINGAPORE - Sea Limited is preparing to fire 3 per cent of Shopee employees in Indonesia, part of a broader wave of regional job cuts intended to curb ballooning losses and win back investors.
The Singapore-based company planned to begin notifying affected staff on Monday at its cash-burning e-commerce arm, according to an internal memo seen by Bloomberg News.
The 3 per cent cut in Indonesia aligns with layoffs of a low single-digit percentage across the division, a person familiar with the matter said, asking to remain anonymous discussing internal actions.
Shopee is one of Sea’s two major businesses, alongside a gaming arm that popularised the mobile hit Free Fire. The company ended 2021 with more than 67,000 people overall.
Management announced the impending layoffs during a town hall on Monday for affected teams, which included Shopee’s marketing as well as operations units.
“These changes are part of our ongoing efforts to optimise operating efficiency with the goal of achieving self-sufficiency across our business,” Shopee said in an e-mailed statement, without elaborating. The company intends to offer severance packages and assistance as needed, according to the memo.
Sea has lost about US$170 billion (S$239 billion) of market value since an October high on questions about its money-making prospects in an era of rising interest rates and intensifying competition from Alibaba Group Holding in its Asian stronghold.

Last week, billionaire co-founder Forrest Li announced in an internal memo that members of top management will forgo their salaries and tighten company expense policies as the company, which counts Tencent Holdings as its biggest investor, tries to shield itself from the economic slowdown.
Sea's Shopee division, in particular, has pulled back from major markets in Europe and Latin America, in addition to getting banned from India because of rising tensions with Chinese companies.
South-east Asia’s largest tech firm is planning to reduce headcount in gaming - its most profitable division - and in new ventures at its research and development arm, Bloomberg News has reported.
“This was a very difficult decision to make,” management said in the memo. “In general terms, we will offer a fair package for employees who part with us and provide assistance where needed.” BLOOMBERG

 

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Some Singapore staff affected in Shopee's latest job cuts​

Shopee's layoffs include employees in human resources, regional operations, marketing, and product and engineering. PHOTO: REUTERS

Choo Yun Ting
Business Correspondent

SEP 19, 2022

SINGAPORE - Employees affected by e-commerce platform Shopee's latest round of job cuts will be given "appropriate compensation packages" in line with market norms, the firm said in a joint statement with the Creative Media and Publishing Union (CMPU) on Monday.
This comes as some staff in Singapore were informed that they were part of further layoffs on Monday.
The Straits Times understands that a low single-digit percentage of Shopee workers are affected, although it is not clear how many of the platform's regional markets will be hit in this latest cost-cutting exercise.
Shopee's layoffs include employees in human resources, regional operations, marketing, and product and engineering, The Business Times reported on Monday.
It also cited sources saying that some workers, including those in Singapore and China, began receiving e-mail notices of their layoffs shortly after department-wide town halls on Monday.
Shopee, the e-commerce arm of New York Stock Exchange-listed Sea, had earlier this year cut workers in its ShopeeFood and ShopeePay teams in the region.
Its parent company has been undertaking extensive cost-cutting measures in recent months, with questions over its money-making prospects intensifying amid the challenging global environment and widespread decline in technology stocks.

Earlier this month, it trimmed staff in its gaming arm Garena and its research and development unit Sea Labs as well.
A Shopee spokesman said in a statement: "These changes are part of our ongoing efforts to optimise operating efficiency with the goal of achieving self-sufficiency across our business.
"We are extending support to our affected colleagues during this transition."
The joint statement by Shopee and CMPU said that employment facilitation and assistance, including career coaching and job matching services via CMPU's network and the National Trades Union Congress' e2i (Employment and Employability Institute), will be offered if required.
CMPU will also continue to work closely with Shopee to ensure that employees' interests and welfare are taken care of as much as possible, it added.
MORE ON THIS TOPIC
Shopee catches would-be employees off guard after it withdraws some job offers
Sea's secretive billionaire CEO Forrest Li opens up after 75% stock crash
Bloomberg reported on Monday that Sea is preparing to lay off 3 per cent of Shopee employees in Indonesia as part of the broader wave of regional job cuts to curb ballooning losses and win back investors.
Affected teams included Shopee's marketing as well as operations units.
Last week, Sea co-founder Forrest Li said in an internal memo that members of Sea's top management will forgo their salaries and cap business expenses, emphasising the need for the company to become "self-sufficient".

 

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Grab sees no big layoffs despite weak market​

Grab has not got to the "desperate" point of a hiring freeze or mass layoffs, said its chief operation officer. ST PHOTO: KUA CHEE SIONG

Sep 25, 2022

SINGAPORE - Grab - South-east Asia's biggest ride-hailing and food delivery firm - does not envisage having to undertake mass layoffs as some rivals have done, and is selectively hiring, while reining in its financial service ambitions.
Chief operating officer Alex Hungate said that earlier in 2022, Grab had been worried about a global recession and was "very careful and judicious about any hiring", and as a result, it had not got to the "desperate" point of a hiring freeze or mass layoffs.
"Around midyear, we did some kind of specific reorganisations, but I know other companies have been doing mass layoffs, so we don't see ourselves in that category," Mr Hungate, 56, told Reuters in his first interview since joining Singapore-based Grab Holdings in January.
The company was hiring for roles in data science, mapping technology and other specialised areas, though every hire was a much bigger decision than it used to be, he said.
"You want to make sure that we're conserving capital. The hurdle for making a hire has definitely been raised," Mr Hungate added.
Decade-old Grab, a household name in South-east Asia, had about 8,800 staff at the end of 2021. Like its rivals, it has benefited from a boom in food services during the Covid-19 pandemic, while ride-hailing suffered.
As economies open up, food delivery demand is softening while ride-hailing has yet to fully recover. Tech valuations have also fallen dramatically, and inflation, slower growth and rising interest rates have emerged as risks.

In recent weeks, South-east Asia's largest e-commerce firm Shopee cut jobs in various countries and shut some overseas operations, after parent Sea reported widening losses and scrapped its annual e-commerce forecast.
Mr Hungate, a veteran of the financial services, logistics and food sectors, has spearheaded a push away from low-margin business lines as Grab races to turn profitable.
Second-quarter loss narrowed to US$572 million (S$817 million), from US$801 million a year earlier. But in August, it cut its gross merchandise volume outlook for the year, blaming a strong dollar and ebbing food delivery demand.

In August, Grab said it was shutting dozens of so-called dark stores - distribution hubs for on-demand groceries - and slowing the roll-out of its "cloud kitchen" centralised facilities for deliveries.
"The other area where we've really tightened our strategic intent is in financial services, where we were growing payments, wallets and non-bank financial lending quite significantly off-platform and on our platform," said Mr Hungate.
Grab reorganised its fintech unit this year to focus on more lucrative areas, and Reuters reported on the exit of some senior executives.
Grab is now mainly focusing on selling its lending products and insurance on its platform to merchants and drivers who often repay from their income streams on the platform.
"As we make this shift, the business mix will move towards higher margins," said Mr Hungate.

Grab, which operates in 480 cities in eight countries, has more than five million registered drivers and more than two million merchants on its platform.
It caught global attention in 2018 when it acquired Uber's South-east Asian business after a costly five-year battle.
Grab is betting on growing financial services by offering banking and other products with partner Singtel in key markets.
It listed on the Nasdaq last December after a record US$40 billion merger with a blank-cheque company.
Mr Hungate said it was "good timing" for the company to look again at how it spends money, given the increased scrutiny of finances and the need to respond to shareholders.
"Maybe we were lucky in a sense that the discipline of being a public company came at just the right time," he said, adding that Grab's US$7.7 billion cash liquidity meant it was one of the best-capitalised industry players in South-east Asia.
Grab's shares have tumbled about 60 per cent this year, to give it a market value of US$10.6 billion.
Reuters reported in August that Grab's Indonesian rival GoTo was seeking to raise about US$1 billion through a convertible bond issue.
Mr Hungate said Grab would provide details of its progress towards profitability and other metrics at its first investor day on Tuesday.
REUTERS

 

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Grab sees slower growth while it pursues turning profitable in 2024​

Grab Holdings chief executive officer Anthony Tan says Grab is firing on all cylinders to improve its profitability trajectory. PHOTO: ST FILE
UPDATED

Sep 27, 2022

SINGAPORE - Grab Holdings expects sharply slower revenue growth next year as the South-east Asian Internet giant adjusts to a market downturn and speeds up efforts to reverse years of losses.
The ride-sharing and delivery provider gave the forecast for a 45 per cent to 55 per cent increase at its first investor day, trying to reassure shareholders that it is on the rebound. Analysts were projecting 84 per cent growth for 2023 on average.
The company also said it anticipates breaking even in the second half of 2024 on a conditional basis, and excluding one-time items.
“Looking ahead, we’re firing on all cylinders to improve our profitability trajectory,” chief executive officer Anthony Tan said at the company’s event in Singapore on Tuesday. “Grab is trying to achieve this by growing our top line in a sustainable manner.”
Grab, long considered one of the rising stars of South-east Asia, has struggled since it went public through a merger with a special purpose acquisition company (Spac) in December 2021. Shares have tumbled more than 70 per cent as the company racked up losses in the post-Covid-19 era and the stock market soured on unprofitable tech ventures.
The company, which went public by merging with Altimeter Capital Management’s Spac in what was originally a US$40 billion (S$57.4 billion) deal, is now worth about US$10.8 billion.
Grab, which counts Japan’s SoftBank Group and Uber Technologies as its two biggest shareholders, expects losses to narrow to US$380 million on an adjusted basis in the second half of 2022.

Executives said it now aims to break even by the latter half of 2024 on an adjusted earnings basis before interest, taxes, depreciation and amortisation (Ebitda). That excludes as many as a dozen exceptional items, from fair value losses in investments to “restructuring costs”.
“It’s the right strategy, although the market is less patient now,” said DBS analyst Sachin Mittal, who rates Grab a "hold". He had estimated revenue growth of 77 per cent for 2023 and adjusted Ebitda breakeven in 2025.
In the meantime, the company said it has about US$6 billion of cash and liquid items on hand, giving it time to turn its on-demand and fintech services around.
Mr Tan’s vision of creating a so-called super app for South-east Asia was aggressive, but led to extensive losses. Grab lost US$3.4 billion in 2021 and has piled up almost US$1 billion of losses in the first two quarters of this year. Revenue this year is set to roughly double to as much as US$1.3 billion, Grab said last month.
The company started out focused on the ride-hailing business and competed effectively against Uber. The US company ended up selling Grab its business in South-east Asia in return for a stake in its Singapore rival. Grab then launched an ambitious - and expensive - campaign to expand into adjacent businesses, including food delivery and finance. It also added everything from hotel bookings and health services to gifts and entertainment experiences to its app.

Chief operating officer Alex Hungate said Grab will now have a more defined strategy, outlining an effort to make the company "South-east Asia's largest and most efficient on-demand platform that enables local commerce and mobility".
"This is not just a bunch of words on a page," he said. "This defines our strategy in a more focused way than we've ever defined before."
Grab also plans to expand its monthly subscription programme, where users pay a flat fee for deals across mobility, food and parcel delivery services on its app. It will also focus on corporate customers, groceries and advertising and fintech services to boost profitability.
The company is counting on turning around its loss-making delivery and financial services businesses to hit its profit target. It had previously forecast its deliveries division would get into the black by the second quarter of next year, when it should have margins of at least 3 per cent.
Grab expects its digital bank operation, run with Singtel, to break even only by 2026. BLOOMBERG

 

[LITTLEREDDOT]

Forum: Actual experience at digital banks has not matched the hype​

SEP 23, 2022

Recent news coverage on digital banks as well as my experience with them have led me to question the purpose of these banks (Making digital banks more inclusive, Sept 16).
My digital banking experience thus far with Trust Bank has been a step down.
The novelty of having a nice uncluttered interface and friendly messages displayed on screen wore off quickly.
As a customer, I get a basic savings account and credit card services that most other banks can provide.
Customer service, relying mainly on chat rooms, is hard to access. Calling the help lines involves a long wait.
To pay for my Trust Bank credit card bill, I was instructed to do a fund transfer using another bank's digital service. It is ironic for a new digital bank to ask its customers to use another bank's digital app. A simple deduction from my Trust Bank savings account or payment via a third-party channel like AXS or 7-11 would make more business sense.
After the digital bank licences were announced, it was thought that incumbent banks would be motivated to improve their services and invest in digital transformation. That has been largely successful in spurring competition, with consumers benefiting the most.

Now that the digital banks are here, the actual experience does not quite match the hype - at least not yet.

Chen Wencong

 

[syed putra]

I briefly read some time ago that they make money from the customers' float i.e. the customers' monies sitting in its brokerage accounts. Imagine putting USD500 million of customers' monies in overnight deposits earning 0.1%. That is $500,000 free money in 1 night and $182 million in 1 year.

I was thinking of combining the entire asean stock exchange in one domination on the net.
Then split it in two division. Top tier companies and small ones.
You think many will trade on this robin hood style?

 

[LITTLEREDDOT]

Malaysia’s sovereign wealth fund on why it did not invest in ride-hailing giant Grab​

PUBLISHED THU, AUG 4
Su-Lin Tan@SULIN_TAN

• Chief Investment Officer Azmil Zahruddin told CNBC the fund’s investment strategy was to focus on large investments — not direct startup deals.
• “Our DNA is that we manage large investments. VC investing is not really what we do, and it’s not really our expertise and skill set,” Zahruddin told CNBC.
• But Khazanah would continue to deploy funds into the technology sector and has been doing so in the past 10 years, he said.

WATCH NOW
VIDEO02:57
Malaysia’s sovereign wealth fund says VC investing is not what we do

Malaysia’s sovereign wealth fund Khazanah Nasional has defended its decision not to make an early investment in Southeast Asia’s ride-hailing and food delivery superapp Grab.
Chief Investment Officer Azmil Zahruddin told CNBC the fund’s investment strategy was to focus on large investments — not direct startup deals.

Khazanah could not close an early deal to fund the Malaysian-founded Grab.
Other investors including Singapore’s state-owned investor Temasek eventually took a stake in Grab and the ride-hailing giant moved its headquarters to Singapore. The company went on to raise $4.5 billion and listed on Nasdaq in late 2021 through a SPAC merger with Altimeter Growth Corp, making Grab the biggest listing in the U.S. by a Southeast Asian company.
Khazanah came under criticism for what some have said was a “missed opportunity” for Malaysia.

Anthony Tan, chief executive officer of Grab Holdings Inc., center right, and Tan Hooi Ling, co-founder of Grab Holdings Inc., celebrate on stage during a bell-ringing ceremony as Grab begins trading on the Nasdaq, in Singapore, on Thursday, Dec. 2, 2021.
Ore Huiying | Bloomberg | Getty Images
“You have to look at what Khazanah is and what its DNA is,” Zahruddin said in an exclusive interview with “CNBC Squawk Box Asia” on Thursday.
“Our DNA is that we manage large investments. [Venture capital] investing is not really what we do, and it’s not really our expertise and skill set.”

“So what we try to do is, instead of trying to do those investments directly, we actually seed investments into VC funds who then invest into companies around the region.”
Zahruddin agreed, however, that it was important for Malaysia to support its entrepreneurs and retain its talent.

He said Khazanah would continue to help Malaysian startups through an indirect approach of investing into funders that take a stake in these new companies and potentially investing in them directly after they have matured to a size that meets the fund’s investment criteria.
To that end, Zahruddin said Khazanah invested in Grab’s competitor Uber through an intermediary funder which was willing to invest in Uber at an early stage.
Khazanah’s investment in the foreign-owned Uber instead of Grab, which was started by two Malaysians, raised eyebrows in the Malaysian investment community.

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Grab dominates ride-hailing in Singapore and operates across Southeast Asia. The company has been suffering losses since its listing last year and in its latest results for the first quarter, Grab posted a net loss of $435 million although revenue has risen to $228 million — up 6% year-on-year.

Outlook for venture capital markets​

Zahruddin said the venture capital markets have been quite challenging and many endowment funds that have been active in venture capital have seen their investments fall by up to 40% in the past year.
But Khazanah would continue to deploy funds into the technology sector and has been doing so in the past 10 years.
“In hindsight, it is a good thing that we’re not really able to do direct investments anyway, because that is something that is quite challenging for anyone who’s been in VC,” Zahruddin said.

In hindsight, it is a good thing that we’re not really able to do direct investments anyway, because that is something that is quite challenging for anyone who’s been in VC.
Azmil Zahruddin
KHAZANAH NASIONAL

Khazanah posted a nearly 80% drop in annual profits in 2021 to 670 million Malaysian ringgit, or $150.36 million. The year before profits also fell about 60% to RM $2.9 billion.
The sovereign wealth fund said the fall in profits were due to its continued extension of financial assistance to its airlines and tourism investments suffering from Covid-19 disruptions.
Last month, Khazanah announced it would explore new investment opportunities in Turkey following a meeting between representatives from the fund and the Turkey Wealth Fund in Istanbul.

 

[LITTLEREDDOT]

In South-east Asia, Sea and Grab Holdings, Singapore's biggest tech companies, are emblematic of this new reality: Their US-traded stocks have lost more than half their value this year, and Sea warned it does not anticipate being able to raise funds in the market.

Survival tips for tech start-ups as funding dries up​

Tech companies the world over have seen the worst year of their lives amid surging inflation and interest rate hikes. ST PHOTO: LIM YAOHUI


OCT 12, 2022

SINGAPORE - For years, becoming a unicorn was the main goal of start-ups. Now, with venture funding drying up and many young companies' survival in doubt, another creature is the talk of the town: the cockroach.
Venture capitalists and technology chieftains converged in Singapore in recent weeks to hobnob over a number of high-profile annual conferences, marking the city-state's grand coming-out-of-Covid-19 party.
Yet gone was glamour and talk of blitzscaling, and participants instead focused on the drastic need for conserving cash and a dimming future.
"It's cockroach time - do whatever it takes to survive," Ms Tessa Wijaya, co-founder of Xendit, a digital payments firm valued at US$1 billion (S$1.4 billion), said during a panel discussion. "It's a little bit gross but it kind of works. If you can survive the next two, three years, you're probably going to thrive."
In the past several years, South-east Asia attracted abundant capital from investors eager to bet on one of the fastest-growing Internet economies. Perpetually growing teams was the norm at richly funded companies and for many young leaders and staff, this was the only environment they've ever known.
Now the start-up ecosystem is facing headwinds. Global venture funding slumped to US$74.5 billion in the past three months, its lowest level in nine quarters, according to CB Insights. That represents a 34 per cent quarterly drop, the biggest in a decade.
"Cash is not only king, it's king, queen and everything else," Mr Raj Ganguly, who started B Capital Group with Facebook co-founder Eduardo Saverin, said at SuperReturn Asia, a conference that drew a record 1,500 senior executives. "A lot of what we've been doing is pushing companies to have more realistic cash runway discussions."

That sentiment was echoed by Ms Jenny Lee, a managing partner of GGV Capital and one of the most sought-after figures who spoke at five conferences, including Forbes Global CEO Conference and the Milken Institute Asia Summit.
"In my 22 years as an investor, this is probably the most complex environment globally," Ms Lee said at the Tech in Asia Conference on Sept 21.
The most important thing to remember in a downturn, she said, is never the valuation but "your ability to have a cash runway".

Her venture capital firm is advising its portfolio companies to have enough cash to stay afloat for 36 months without having to raise additional funds.
About 80 per cent of them are now in that bucket, said Ms Lee, who launched GGV's first office in China in 2005 and now leads the firm's United States fund-raising activities.
After reaching sky-high valuations, tech companies the world over have seen the worst year of their lives amid surging inflation and interest rate hikes. Many are cutting jobs and shutting parts of their operations to shore up balance sheets ahead of a potential recession.
In South-east Asia, Sea and Grab Holdings, Singapore's biggest tech companies, are emblematic of this new reality: Their US-traded stocks have lost more than half their value this year, and Sea warned it does not anticipate being able to raise funds in the market.
Founders who have been through previous cycles remained upbeat about the prospects for companies with proven business models.
Mr Julian Tan, the founder of a start-up whose app FastGig matches employers with part-time job seekers, said he has not had problems raising funds this year and has received calls from investors looking for sustainable businesses while trying to tackle social issues.
He said South-east Asia has so far had few services for manual and semi-skilled employees, which make up the vast majority of the working population.
"Not-so-good start-ups have been filtered out. Now is the time for real start-ups to shine, go out and raise from value investors," said Mr Aung Kyaw Moe, who sold a chunk of his 19-year-old payments company 2C2P to Ant Group this year. "We cannot go and buy US$1 revenue with US$2 subsidy using investors' money. This has to stop."

As in previous downturns, efficiency is emerging as a key focus.
"This was a word that wasn't used for years," B Capital's Mr Ganguly said. "It was always about growth, growth, growth. Now we talk a lot about efficiency."
Mr Patrick Cao, president of Indonesia's biggest Internet company, GoTo, said his firm will focus on reducing subsidies and streamlining operational expenses while offering services that merchant partners can monetise further.
"We've accelerated our break-even targets," he said, "but there's still a lot of work to be done."
GoTo's arch-rival Grab downplayed its long-held slogan of being "South-east Asia's leading superapp", the powerful tagline that helped the company raise billions of dollars from investors including SoftBank Group.
Its newly defined goal, posted in its investor day presentation slides, underscores its intention to become more focused after burning through cash since its inception: "South-east Asia's largest and most efficient on-demand platform that enables local commerce and mobility." BLOOMBERG

 

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Bright spots still ahead for tech giant Sea​

Shopee plans to exit the Argentinian market and shut local operations in Chile, Columbia and Mexico, citing uncertain macroeconomic environment and its aim to focus resources on core business. REUTERS

Adeline Tan

Oct 24, 2022

SINGAPORE – The short-term prospects may not look too rosy for tech giant Sea, but industry watchers believe its dominant positions in a range of markets should stand it in good stead.
The firm’s path to profitability is also being closely watched, with analysts hoping that its recent cost-cutting measures will start to show results.
Sea was founded in Singapore in 2009. It now has three main business units – e-commerce platform Shopee, game developer and publisher Garena and SeaMoney, a digital financial services provider set up in 2014. The company, which is listed in New York, is based here but also has operations in other parts of the world, including South-east Asia, Taiwan and Latin America.
Chief executive Forrest Li said the aim is to become cash-flow positive in the next 12 to 18 months.
The company has trimmed costs through staff cuts and tighter policies on expenses, such as sticking to economy class flights and curbing spending on hotel stays and meals. Sea’s top management will also forgo their salaries until the business is self-sufficient.
Maybank’s head of research in Singapore, Mr Thilan Wickramasinghe, and analyst Kelvin Tan said the company has been taking action to rein in costs and close underperforming businesses. For example, it has made significant changes to monetise its Shopee unit, including cutting back on giveaways and charging sellers for advertisements.
“It is also refocusing on markets where it has leadership. In the medium term, we believe that these changes could support it to increase resilience and earnings visibility,” they added.

Sea’s adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) loss stood at US$506 million for the second quarter of 2022 compared with a US$24.1 million loss in the same period a year earlier. Shopee recorded an Ebitda loss of US$648.1 million for the quarter, but Garena has a positive Ebitda of US$333.6 million.
“Garena is already Ebitda-positive. It is the e-commerce side that needs to bring in the magic... I think we will see a substantial reduction in losses next year,” said DBS Bank’s head of telecom, media and technology research analyst, Mr Sachin Mittal, adding that he estimates Shopee could reduce its Ebitda loss by US$1.2 billion in 2023.
Shopee announced in September that it would exit the Argentinian market and shut local operations in Chile, Columbia and Mexico, citing an uncertain macroeconomic environment and its aim to focus resources on core businesses.
Pulling back from these markets could save Shopee about US$300 million in 2023, said Mr Mittal. Losses in Brazil, which peaked in the fourth quarter of 2021, is expected to narrow in 2023, he added.
Changes in consumer behaviour have been the main cause of slowing growth at many e-commerce platforms, including Shopee. As countries emerge from the Covid-19 pandemic, consumers are shifting some of their spending back to bricks-and-mortar stores.
High interest rates and rising inflation are also prompting consumers to cut back on spending.
But the silver lining for Sea is perhaps its market dominance and how it stands out against its competitors, analysts said. Globally, Shopee was the top-ranked app on Google Play in the shopping category by total time spent in the app in the second quarter of 2022. Garena’s hit game, Free Fire, was also the most downloaded game globally in the same period.
“Shopee is consistently the No. 1 shopping app in South-east Asia; and it has outgrown Lazada by four times,” said the Maybank analysts. Its gross merchandise value hit US$62.5 billion in the 2021 financial year, while Lazada’s was US$21 billion for the 12 months to September 2021.
One strong competitive advantage Shopee has is the ability to cross-promote its products across its platforms. For example, Garena doubles as a social platform and acts as free advertising for Sea’s non-gaming products, the Maybank analysts said.
Despite the headwinds, Sea’s longer-term outlook is positive because of its market share in the Asean region and strong growth potential in the financial services segment, said CGS-CIMB analyst Ong Khang Chuen.
He noted: “Leveraging its strong e-commerce position in Indonesia, Sea has rapidly scaled its digital bank operations there and overtaken digital bank peers to be the leader in both deposits and lending size. We believe it can replicate this in other South-east Asian countries where a huge population remains unbanked.”
Not having very strong competition in many of its markets that it operates in is also an advantage for Shopee, said Mr Mittal, although he noted that Lazada, one of Shopee’s strongest competitor regionally, and Indonesian online marketplace Tokopedia pose challenges.
“In many markets, competition is not a huge worry for Shopee. It dominates the e-commerce sector in South-east Asia, and that is something you can’t ignore,” he added.