Seize, the ride-hailing and food-delivery startup that operates in most of Southeast Asia, hit an essential milestone for any tech agency: Its first-ever worthwhile quarter, on the tail finish of 2023.
Seize reported a revenue of $11 million for the ultimate three months of 2023, in comparison with a $391 million loss in the identical interval a yr earlier. Income for the quarter additionally grew to $653 million, a 30% improve from the identical interval in 2022.
“Crossing the break-even is a degree on the road,” Alex Hungate, Seize’s chief working officer, says. “We’ve acquired a area the place there’s lots of potential to develop scale, so we simply acquired to maintain pushing development.”
Many tech firms have been pressured to tighten their belts lately. Backers and traders have soured on continuous losses and excessive spending, as a result of greater rates of interest and a more durable macroeconomic atmosphere.
Seize has by no means made an annual revenue. In 2023, Seize posted a internet lack of $485 million, an enormous enchancment from the $1.74 billion loss it reported in 2022. The startup’s shares have misplaced virtually 75% of their worth since their debut in December 2021, when the corporate listed on the Nasdaq through a merger with a particular objective acquisition firm (SPAC).
Seize achieved its first-ever worthwhile quarter on the again of a sequence of cost-cutting measures for the Southeast Asian tech agency, together with freezes on hiring and salaries for senior managers, and a one-time accounting achieve.
The ride-hailing startup will quickly present whether or not it’s been capable of construct on that momentum within the new yr: Seize will report its earnings for the primary quarter of 2024 on Could 15.
A knowledge science firm
Hungate explains that Seize’s earlier investments are actually beginning to bear fruit, permitting the corporate to reinvest its earnings in its companies to draw new customers and retain present ones.
Seize is greatest generally known as a ride-hailing and meals supply service, tapping into a military of drivers throughout Southeast Asia to hold passengers and meals from place to position. However Hungate as a substitute sees Seize as an information science firm with sufficient inside data to optimize income development.
One instance is Seize’s choice to create its personal mapping resolution, as a substitute of licensing one thing from a third-party supplier (as most different ride-hailing apps do).
Southeast Asian cities are large and messy, with slender streets and roads that aren’t clearly signposted. One other key function of Southeast Asian cities? Procuring malls, which regularly function hubs for residential and business properties along with stores. However drivers can get misplaced in labyrinthine complexes.
“Fourteen % of the motive force’s time is taken within the final 2% of the journey as a result of they usually can’t discover the place within the mall the place they’re choosing up or dropping off,” Hungate says. He claims that higher mapping helped drivers earn 14% extra per hour final yr in comparison with 2022, because the expertise permits the corporate to raised allocate its fleet.
One other space the place Seize takes benefit of information is its budding monetary companies division. Seize presents loans to drivers by its GrabFin service and digibanks. The startup makes use of knowledge similar to driver scores, security data, and kind of rides accepted when it assesses driver threat. Hungate claims that Seize’s recollection effectivity is greater than conventional banks (although Seize additionally permits drivers to deduct mortgage funds from their earnings).
Seize’s development
Hungate joined Seize after a stint as CEO of Singapore Airport Terminal Companies, a meals and logistics firm recognized for offering in-flight catering companies at Singapore’s Changi Airport. Earlier than that, he led HSBC’s Singapore operations for nearly six years.
Seize acquired its begin when Anthony Tan and Tan Hooi Ling launched a Malaysian ride-hailing service referred to as MyTeksi in 2012. The startup rapidly expanded to the Philippines, Singapore, Thailand and Indonesia. It moved headquarters to Singapore in 2013, and renamed itself Seize.
Ore Huiying—Bloomberg through Getty Photos
The ride-hailing startup managed to push out Uber in Southeast Asia, making it one of many few markets that saved the U.S. ride-hailing big out. Seize ultimately acquired Uber’s Southeast Asia belongings in March 2018; in alternate, Uber took a 27.5% stake in Seize. The startup was additionally backed by Japan’s Softbank, Singapore’s Temasek, and BlackRock.
Seize solely serves Southeast Asian markets, all with completely different ranges of per capita revenue, starting from rich Singapore to comparatively poorer Cambodia.
That dictates how Seize operates, Hungate says. Many Southeast Asians are underbanked and so lack bank cards not like customers within the West. By creating its personal fee system, Seize might eradicate using money and serve the underbanked inhabitants—whereas additionally tethering prospects to the app.
Regional variations are additionally why Seize is banking on its “superapp” technique. Southeast Asian customers favor to do the whole lot on one app–which Hungate credit to restricted capability on low cost smartphones and restricted knowledge bandwidge.
Hungate says that Seize will proceed to concentrate on Southeast Asia. “It’s the third-most populous area on the planet, 650 million customers. Just one in 20 of these 650 million customers are customers of Seize,” he says.
“We expect there’s great upside.”
