Sea, the parent of e-commerce player Shopee, reported Tuesday that fourth quarter revenue for its digital financial services surged 711 percent from the year-ago period. 

SeaMoney has grown in tandem with a boom for e-commerce services in Southeast Asia, a trend which accelerated due to the pandemic. The region still has a large unbanked population, however, creating gaps in the ability to collect payments – such as a dearth of credit card use -- which aren’t typically seen in developed markets.

Revenue for the SeaMoney segment was $197.5 million in the fourth quarter, and for the full year, rose around 673 percent from 2020 to around $470 million, the e-commerce, digital entertainment and financial services super-app reported.

User Numbers Rise

The quarterly active users across all of SeaMoney’s products hit 45.8 million, up nearly 90 percent on-year, Sea said.

For Indonesia, among Sea’s largest markets, more than 20 percent of the fourth quarter’s active users tapped multiple digital financial services from SeaMoney, Sea said. Those services can include payments, loans, bank balances or buying insurance policies.

Sea’s Chairman and Group CEO Forrest Li called the development «a highly positive indicator» of how his company can bring financial services to its consumer ecosystem.

«Synergistic»

«In particular, we see Shopee and SeaMoney as both highly synergistic with one another and enjoy a strong flywheel effect in their scaling,» he said, according to the transcript of the earnings call.

Of the around 400 million adults in Southeast Asia, around 198 million are unbanked -- or don’t have a bank account -- while another 98 million are underbanked, with a bank account, but without access to credit, investments and insurance, according to the e-Conomy SEA 2019 report published by Google, Temasek and Bain & Co. in October 2019, prior to the start of the Covid-19 pandemic.

In 2021, gross transaction value of digital payments in Southeast Asia grew to $707 billion, up 9 percent from $646 billion in 2020, according to the e-Conomy report for 2021, published November 2021. Consumer e-wallet usage is up 45 percent from pre-Covid levels, the 2021 report said.

Expanding Offerings

Sea said its SeaMoney offerings have expanded to include credit services to consumers and merchants in more markets, digital banking and insurtech in Indonesia and obtaining a banking license in the Philippines.

In December 2020, Sea was awarded a digital bank license in Singapore, although it has yet to launch its offering in the city-state.

To be sure, Sea’s digital financial services segment reported a fourth quarter loss of $149.8 million for its adjusted earnings before interest tax depreciation and amortisation (ebitda), although that narrowed from a loss of $171.3 million in the year-ago quarter.

Revenue Guidance

But the company said it expected the SeaMoney business to reach cashflow positive by next year.

Sea guided that 2022 revenue for the digital financial services segment would come between $1.1 billion and $1.3 billion.

For the group, Sea reported revenue jumped around 128 percent on-year to $10 billion for 2021, with the net loss narrowing to $1.62 billion from $2.04 billion in 2020. For digital entertainment, which includes the Garena online gaming business, revenue climbed 114 percent in 2021 to $4.3 billion, while e-commerce revenue, which includes the Shopee platform, rose 136 percent on-year to $5.1 billion.