One of the surprising tidbits is that Sea is a leader in the Southeast Asia eSports market

Sea, the company formerly known as Garena, officially filed its IPO paperwork to the New York Stock Exchange on Friday.

The company that brought League of Legends to Southeast Asia has since grown itself into one of Southeast Asia’s most valuable internet companies and has branched into mobile payments and e-commerce.

Prospectus’ are long, so we dug through it and pulled out five facts we found intriguing. Let’s have a look.

Sea is pitching its home-field advantage to potential investors

Investors will likely point to the competition from early-investor Tencent (gaming), Alibaba (e-commerce) and Ant Financial (payments) as potential concerns. To mitigate this, Sea is pitching itself as the localised alternative; the company that truly understands Southeast Asia, giving Sea a distinct home field advantage.

With the exception of Taiwan, the prospectus is laser-focussed on Southeast Asia. The word ‘expansion’ was used in reference to services on the platform and there was hardly a mention of China or Western markets.

The prospectus did, on the other hand, make the following tagline a key point:

“Greater Southeast Asia’s Unique Complexities Confer Meaningful ‘Home Court Advantages’ for Sea”.

The idea for this IPO is not to pitch itself as a companies with its fingers across the globe, but rather as a dominant regional player in Southeast Asia.

Shopee has nearly 10 million monthly active users and 1.6 million engaged sellers

Shopee is an incredibly important asset for Sea and the prospectus revealed a company that seems primed to battle Carousell.

Of the 9.8 million people who use Shopee every month, 3.8 million of them are daily users and the company says they spend 22 minutes a day in the app.

More importantly, Sea says 4.2 million people make purchases through the app and 90 per cent of the sales are repeat buys. Shopee was the top platform for Gross Merchandise Value and the number of transactions for the first half of 2017.

In July, Shopee launched a more traditional e-commerce mall which now has 1,711 brands on board.

Sea is well positioned in eSports

Shopee seems to have a bright future, but the core of Sea remains in its online gaming platform. Still named Garena Digital Entertainment, it is the number one in online gaming by market share in Southeast Asia. But, that’s not overly intriguing for people who pay attention to the company.

The interesting tidbit is that in 2016 it had the most eSports viewers in in Southeast Asia. Sea is well-positioned in a sector that seems set for massive growth in popularity. According to statistics used by Sea, the eSports fanbase could grow to as many as 380 million people in 2017.

The company also highlighted the fact that its live eSports tournaments drive engagement in Garena Digital overall and help drive in-game purchases.

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Sea said it will continue to invest in eSports moving forward.

A ‘history of net losses’ is mentioned as a potential risk factor

Sea recognised it may not achieve profitability in the future, and that the company consistently operates at a loss. Plus, the numbers revealed Sea’s net losses are actually growing.

Its year-on-year comparison from the first halves 2016 and 2017 saw a doubling of losses to US$154 million — a number that competes with its 12-month losses last year of US$196 million.

In 2014 and 2015, Sea also saw a net loss of just under US$87 million for both years.

The company’s total revenue jumped from US$167 million in the first half of 2016 to US$195 million in 2017.

Sea still generates a significant chunk of its revenue from online gaming, and also mentioned this fact under ‘potential risk factors’.

The plans with the IPO

Sea wants to use the IPO to facilitate user acquisition, content procurement and R&D. The rest of the money is set aside for ‘general corporate purposes’.

The IPO is also targetted at talent acquisition/retention by providing potential and current employees with tangible equity options in their contracts.

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However, the filing was clear to state this plan is flexible according to the success or failure of Sea post-IPO.

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