Fintech
Sea’s fintech arm was once just its sidekick. Now he’s a budding star
During Sea Limited’s May 15 earnings call, the Singapore-based tech conglomerate made it clear: It’s ditching its old playbook, and it’s paying off.
Its digital financial services division, Seamoney, reported nearly $149 million in adjusted Ebitda Adjusted Ebitda Adjusted Ebitda A financial metric calculated by removing one-time, irregular, and non-recurring items from Ebitda (earnings before interest, taxes, depreciation , and depreciation and amortization) Adjusted Ebitda Adjusted Ebitda A financial metric calculated by removing one-off, irregular, and non-recurring items from Ebitda (earnings before interest, taxes, depreciation, and amortization) during the first quarter of 2024, i.e., more than 50% increase compared to year-ago levels, the group said in the call. By the end of that day, Sea shares had gained 3%.
Overall, Garena, the company’s gaming division, performed well, while still achieving the highest quarterly earnings. However, its e-commerce arm, Shopee, reported losses for the quarter ended in March. What distinguishes Seamoney’s growth is that, even in 2023, it was the only digital financial services division among Southeast Asia’s tech giants to achieve positive adjusted Ebitda.
Sea, Grab and Goto each operate in different segments, including e-commerce, ride-hailing and delivery services. But given their customer-centric nature, one area where they all intersect is digital financial services.
Initially, these digital arms were set up only to cater to their own platforms. For example, Seamoney started as a payment provider for Shopee.
But now it is surpassing the pack by establishing a diverse identity.
The company’s notable performance is rooted in conscious “strategic differentiation,” said Helena Wang, research analyst at Phillip Securities, a Singapore-based asset management firm.
“While Grab and Goto also integrate e-commerce and other features with financial services, Sea has been proactive in offering unique features and expanding its fintech offerings beyond traditional payment solutions.”
