Singapore’sSea Ltd., the tech startup that’s become Southeast Asia’s most valuable company, increased the size and set the final price of a secondary stock offering to raise at least $2.57 billion.
Sea priced the sale of 13.2 million American Depositary Shares at $195 each, increasing the size from 11 million because of strong demand, according toa statement. The underwriters, led byGoldman Sachs Group Inc. andJPMorgan Chase & Co., have the option for another 1.98 million ADS, which would yield $386 million at the same price.
Sea, a games company that has expanded into e-commerce and digital payments, has surged to a market valuation of almost $100 billion with its shares rising 395% this year alone. It intends to spend the proceeds from the new offering on business expansion, “including potential strategic investments and acquisitions,” the company said in itsstatement.
The companyjust won a license to open a digital bank in Singapore, a coveted award that will allow expansion into financial services. Undercriteria set by the Monetary Authority of Singapore, digital full banks are required to have total capital of at least S$1.5 billion ($1.1 billion), with S$15 million at entry and progressively increasing the capital.
The new capital could be used for its digital bank or to accelerate e-commerce and gaming investments, Bloomberg Intelligence analysts Matthew Kanterman and Joyce Ho wrote in a note.
Sea’s first self-made mobile game, a battle royale called Free Fire, has attracted tens of millions of players and its gameplay is now one of YouTube’s most-watched attractions. The company’s Shopee platform has also surged in sync with greater demand for home shopping and food delivery, having taken the mantle of Southeast Asia’s leading e-commerce provider at the end of 2019, according to research firm iPrice.
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Investors have been betting on Sea becoming its region’sTencent Holdings Ltd. andAlibaba Group Holding Ltd. rolled into one, though the company’s most recent quarterlyresults showed a slight slowdown in its prodigious growth rate.
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