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Local tech firm valued at S$1.25b in US report

Gaming firm Garena cites its ability to tap South-east Asia’s fast-growing markets over the past few years as the reason for its success.

SINGAPORE: Local gaming company Garena has been valued at US$1 billion (S$1.25 billion) in a United States-based report – putting it way ahead of other tech companies here – as the Singapore tech scene gears up with an increasing number of venture capitalist investments and acquisitions in recent years.

The World Startup Report recently published a listing of the top three Internet companies by market valuation in each of the 50 countries in the report, with Singapore coming in at 27th on the list. Each country was represented by its three largest Internet companies.

The second-biggest company in the Republic by valuation was video site Viki at US$200 million.

The top country was the US, with Google valued at US$410 billion, while China was second, with Alibaba valued at US$200 billion.

The report found that the average value of companies in the field of communications is close to US$20 billion. In comparison, media companies are worth about US$5 billion.

A spokesman from Garena attributed its growth to tapping markets in one of the fastest-growing regions in the world.

“In terms of market, South-east Asia, where our operation is primarily based, is one of the most populous and fastest-growing regions in the world. Based on the evolutionary trajectory of the consumer Internet industry we have observed in more mature markets like the US, China, South Korea and Japan, we believed South-east Asia was a largely untapped market when we started Garena in 2009,” he said, adding that the company’s biggest markets are currently Thailand, Vietnam and Taiwan.


The Media Development Authority said the games industry is the fastest-growing media sub-sector in Singapore, with a value-added compounded annual growth rate of 19 per cent from 2007 to 2012. There are 230 gaming companies generating S$660 million in operating receipts and S$100 million in value add in 2012, said the MDA.

The National Research Foundation (NRF) also hailed this development, calling it a milestone for the start-up scene in Singapore. It had supported Garena with a S$655,050 grant in 2008.

“It has set a new benchmark for the local start-up ecosystem. It shows we have moved a notch up in our ability to nurture technology companies in Singapore. As more young people, mid-career professionals and academics are taking the leap to start companies, Garena’s success will encourage them to press on in their ventures,” said Professor Low Teck Seng, the NRF’s chief executive officer.

While a coup for Singapore – this puts it among 29 countries which have at least one Internet company worth S$1 billion – the rest of the local technology industry still lags far behind in terms of market valuation.


Venture capitalists here say what holds most start-ups back from achieving higher valuations is the challenge of really going global.

“I think the difficulty is in going global from Singapore. For us investors, in order to raise money to write large cheques for start-ups, the scene has to be strong enough for us to fund-raise and bring foreign money into the region,” said Mr Vincent Lauria, managing partner at Golden Gate Ventures.

But within and beyond the strategy of going global, Garena has also been inventive in its approach, identifying trends to grow its platform. In 2010, for instance, it integrated its online gaming with social networks.

Now, it is growing its business on mobile.

“With the recent waves of revolutionary development in the mobile Internet sphere, we believe the products and services enabled by the mobile Internet will bring consumers a completely new experience, not only in entertainment, but also for communications, shopping and payment, among many other things,” said the spokesman.

Garena has launched its first mobile product: BeeTalk, a mobile app for people to connect based on location and interests. It has more than 17 million users, with more than 100 million daily messages, the company said.

Similar to what some big companies are doing, it is identifying and incubating promising Internet start-ups in the region.

“Our investment in other start-ups will also provide us great opportunities for strategic cooperation in future as we look to provide innovative and integrated products and services to our user base. Consumers on our platforms can not only access the products and services Garena offers, but also products and services offered by third-party companies invested by Garena,” the firm said.