Posted on Wednesday, Sep 9th 2015
There aren’t many Southeast Asia-based companies that have joined the prestigious Billion Dollar Unicorn club. Singapore-based online and mobile entertainment provider Garena is one of the few who has joined the club and continues to grow at record pace.
When Forrest Li heard Steve Job’s famous “stay hungry, stay foolish” commencement speech at his girlfriend’s Stanford graduation in 2005, he was inspired and realized he wanted to do something different. While pursuing his MBA at Stanford, he was also influenced by the alumni network, visits to VC firms near campus, and big-company CEO speakers. Back in Singapore, and now married to his girlfriend, Li continued to build his network. He met influential people including Skype cofounder Toivo Annus. He then set up his first enterprise backed by three members of his new found network.
His first venture GG Game was developing a single-player gaming product, instead of the high demand multi-player games. The venture could not withstand the financial meltdown and soon shut down. However, Li’s investors did not give up on him. In 2009, Li got a fresh lease on a new venture. He called it Garena and things started looking up.
The group released their first product called Garena+, which was an online gaming and social platform in 2010 focused on the Southeast Asian markets. The platform successfully integrated communications capabilities with digital content to deliver a platform that not only offered impressive gaming, but also networking capabilities. There has been no looking back since the platform’s launch. Today, Garena is the biggest web and mobile platform in Southeast Asia. Many premium micro-transaction-based online games have been exclusively available only on Garena+ including three of the most popular titles in Southeast Asia: League of Legends, Heroes of Newerth, and FIFA Online 3. Garena+ claims to have more than 17 million PC users and more than 14 million on mobile devices across countries like Thailand, Vietnam, Hong Kong, and Taiwan.
Garena has also been launching several other communication-focused platforms. Their offerings include TalkTalk, a real-time voice and video communication platform and BeeTalk, the first indigenous mobile social network in Southeast Asia that helps people find new friends and communities based on locations and interests. Within four months of the BeeTalk’s launch, the application had acquired more than 10 million users.
Garena has also expanded into the fast growing mobile payments segment with the release of AirPay. AirPay is one of Southeast Asia’s fastest growing payments networks that is not only helping users pay for online games but also for their telephone bills, utilities, and e-commerce transactions. AirPay has been developed keeping in mind the emerging markets and allows for users with no bank accounts and credit cards to set up pre-payment accounts. AirPay is currently processing more than $100 million in annualized payment volume.
Garena’s detailed financials are not known. They earn their revenues primarily through sales of virtual goods. Revenues have grown from $17 million in 2011 to more than $200 million last year. Profitability figures are not disclosed, but Garena is expected to have turned profitable in the early years. Garena expects to continue to deliver more than 30% growth annually in the coming years.
Garena’s funding details are also not disclosed. They have been privately funded so far with investments from Tencent, Toivo Annus and Ontario Teachers Pension Plan. Last year, the company was valued at $1 billion. In March this year, the Ontario Teachers Pension Plan invested in Garena at a valuation of $2.5 billion.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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What is Okta's Inorganic Growth Narrative?