DIGITALISATION DRIVES REVENUE SURGE BUT PROFITABILITY REMAINS ELUSIVE
Edition #104, 26 Aug 2021 | View in browser
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Sectors that have fared well during the pandemic such as fintech, e-commerce, and health tech have continued to attract funding for expansion this year.
The fintech sector saw the most deals in Southeast Asia in Q2 this year, followed by e-commerce. The competition for deals in the space appears to have driven up valuations at Series B and C stages, according to DealStreetAsia — DATA VANTAGE.
Source: DATA VANTAGE
As South and Southeast Asia ride a strong wave of digitalisation, the race to grab market share could mean widening losses ahead for the region’s startups.
Last month, merchant commerce platform Pine Labs reported year-on-year revenue growth of 88% for the financial year ended March 2020. Its revenue has been on an uptrend since 2018, but profit after tax (PAT) has been less stable. After trimming its losses in 2019, the firm saw its net loss jump 804% YoY to $31 million in fiscal 2020.
Pine Labs’s financials
Source: DATA VANTAGE
Nevertheless, the firm closed a $600 million funding round in July from new investors, including Fidelity Management, BlackRock, Ishana, Tree Line and a fund advised by Neuberger Berman Investment Advisers. To complement its growth, Pine Labs acquired Southeast Asian loyalty and cashback platform Fave in April.
Corporate solutions firm In.Corp Group, while profitable, saw its profit after tax shrink significantly in 2020. While revenue remained somewhat flat for the year at $38.9 million, its profit dipped to $1.7 million from $9.1 million in fiscal 2019.
Financial services firm Antler Innovation has also enjoyed a rise in demand for cashless solutions, recently reporting a 42% increase in 2020 revenues. However, its losses widened by 45% year-on-year to $5.9 million.
SYNQA (Omise Holdings Pte Ltd) and GrabPay (GPay Network (S) Pte Ltd) are among the few companies that reported a narrowing of losses in 2020. SYNQA reported losses of $9.7 million, down from $20.2 million a year ago, as revenues rose 99% YoY to touch $27.6 million.
GrabPay’s revenue rose by 11% to $51.5 million while net loss narrowed from $14.5 million in the year ended December 2019 to $5.7 million in fiscal 2020.
GrabPay’s financials
Source: DATA VANTAGE
Other updates from DATA VANTAGE
Thermal imaging solutions firm Meridian Innovations received $4.7 million this week as part of an $8 million funding round announced in July.
About $2 million came from new investor Best Ever Pte Ltd, a subsidiary of Best Ever Industries, while existing investors SEEDS Capital and Planetspark together pumped in $1 million. The latest financing saw its share price jump 25% from a previous round in 2019.
Doctor Anywhere received $58.7 million as part of its Series C funding round from Asia Partners, Novo Holdings and existing investors, DealStreetAsia reported this week.
Fintech lending firm Jenfi bagged $6.3 million as part of a Series A funding round led by Monk’s Hill Ventures. The latest round was backed by Golden Equator Ventures and Korea Investment Partners (via the GEC-KIP Fund), 8VC, ICU Ventures, and Taurus Ventures.
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