Despite significant losses, optimism remains for Sea Ltd.’s future as it adapts to evolving challenges.
Last year, Forest Li, the founder of Shopee, was recognized by the Bloomberg Billionaires Index as the richest person in Singapore. However, the co-founder of Sea Ltd., Shopee’s parent company, has experienced a staggering decline of over 80% in his fortune due to a recent market crash that has collectively cost the world’s 500 richest individuals more than $1 trillion (SGD 1.4 trillion) this year.
Once celebrated as Southeast Asia’s most valuable technology firm, Sea Ltd. encompasses e-commerce, online gaming, and digital payments through its subsidiaries, SeaMonkey and Garena. The global consumer internet company employs around 33,000 people and counts Li as the owner of the Lion City Sailors FC. Despite the significant losses at Shopee, Li’s net worth still stands at a noteworthy US$4.7 billion (SGD 6.5 billion), though he has dropped from the ranks of the world’s top 500 wealthiest individuals.
The challenges for Sea Ltd. appear to be ongoing. Shawn Yang, managing director at Blue Lotus Capital, an independent equity research firm in Hong Kong, indicated that the company will “see increasing challenges in 2022.”
Similar to other tech companies that thrived during the COVID-19 pandemic, Sea is now grappling with obstacles such as rising interest rates and geopolitical tensions stemming from the war in Ukraine. Yang pointed out that Sea is facing heightened competition from rivals like Alibaba, and that consumer preferences are shifting back from online to in-person purchases as pandemic restrictions ease.
Other tech leaders have also reported significant losses this year, including Zoom’s Eric Yuan, who saw a decrease of US$4.4 billion (SGD 6.1 billion) in his fortune, and Amazon’s Jeff Bezos, who lost nearly US$58 billion (SGD 81 billion).
Despite these setbacks, Li reassured his employees in March that the valuation collapse of Sea is “short-term pain that we have to endure to truly maximize our long-term potential,” as reported by Bloomberg Wealth. Analysts remain optimistic about the future prospects for Sea, despite its recent challenges.
At 43 years old, Li was born in Tianjin, China, before becoming a Singaporean citizen. Last December, Sea secured a digital banking license in Singapore and acquired Indonesia’s PT Bank Kesejahteraan Ekonomi, which is expected to expand its SeaMoney business to include lending, insurance, wealth management, and other financial services, according to Bloomberg analyst Nathan Naidu.
Sea’s popular mobile game, Free Fire, has been downloaded over 1 billion times on Google Play, and Shopee has become the second-most downloaded shopping app globally on both iOS and Android.
Founded in 2009 by Li, Gang Ye, and David Chen, Sea’s other co-founders have also seen fluctuations in their fortunes. Ye, the company’s chief operating officer, now has a net worth of S$14.5 billion, while Chen, the chief product officer at Shopee, is valued at S$4.8 billion. However, Ye has experienced a loss of US$4.3 billion this year (nearly SGD 6 billion), and Chen’s fortune has dropped below the US$1 billion mark.
The journey of Sea Ltd. and its co-founder Forest Li underscores the volatile nature of the tech industry. Despite recent setbacks, including substantial losses at Shopee, the determination and resilience of its leadership shine a light on potential paths forward. As the market landscape evolves, there remains an undercurrent of optimism regarding Sea’s prospects in expanding digital services, gaming, and e-commerce. While the industry faces significant challenges, new strategies and solutions may yet emerge, leaving us to see how Li and his team will navigate this turbulent period and redefine their success story.
