Sea eyes US$6.3bn in fundraising to fuel expansion plans

Southeast Asian eCommerce and gaming firm Sea plans to raise US$6.3 billion in a share and convertible bond sale. According to multiple media reports including Reuters, this is the region's largest-ever capital raising and marks the second fundraising effort by Shopee in less than a year. Sea said in its announcement last week that it plans to offer 11 million new shares worth about US$3.7 billion and US$2.5 billion in notes. According to CNBC, the company is currently valued at US$185 million.

The company may also offer 1,650,000 additional new shares and an extra US$375 million in notes. Sea also said in its release that it plans to use the net proceeds from the offerings for business expansion and other general corporate purposes, including potential strategic investments and acquisitions.

This comes shortly after Reuters reported that Sea-owned Shopee plans to expand into Poland and is currently seeking out sellers. Citing its sources, Reuters said the move is Shopee's first expansion into the European eCommerce scene. Its gaming unit Garena is currently active in Europe, Reuters said. At the same time, Shopee also plans to launch in Argentina, said Reuters quoting its sources.

Meanwhile, Shopee also made headlines last month when it was reported that the eCommerce firm is eyeing an expansion into India with a recruitment campaign. There were also a series of job ads recruiting for positions such as seller operations to compliance, Reuters said, but the eCommerce firm has yet to launch a localised website or app. Sea declined to comment on its expansion into Poland and India as well as the number of marketing talent it aims to hire.

During the second quarter of 2021, Sea reported a generally accepted accounting principles (GAAP) revenue of US$2.3 billion, up 158.6% year-on-year. Total gross profit for the company stood at US$930.0 million, up 363.5% year-on-year. On the eCommerce front, GAAP revenue jumped 160.7% year-on-year to US$1.2 billion. The gross merchandise value for the quarter was US$15.0 billion, an increase of 87.5% year-on-year, while gross orders amounted to 1.4 billion, an increase of 127.4% year-on-year. Shopee founder Forrest Li said the deepening monetisation was mainly driven by growing merchant investments in marketing and advertisement on the platform to better attract and serve buyers. Shopee also recently brought on board Jackie Chan to spearhead its recent 9.9 campaign. 

Meanwhile, for digital entertainment, Sea reported an 84.8% year-on-year increase in quarterly paying users to 92.2 million. Bookings also increased 64.8% year-on-year to US$1.2 billion. Sea's game Free Fire hit over one billion downloads on Google Play and was ranked third gobally by average monthly active users for mobile games on Google Play in the second quarter of 2021, App Annie said.

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