After a string of recent setbacks, Sea Limited may be in a good position to recover. The question for investors is simple: should they buy the stock now?
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By late 2021, investors valued Singapore-based Sea Limited (NYSE: SE) at nearly £200 billion. Its stock had climbed past £350 on hopes that the company would take control of online retail across southeast Asia and other markets. Then the collapse came: in less than a year, Sea lost over 80% of its market value. Behind that wild swing was a computer game that helped turn the company into an online shopping powerhouse.
Sea Limited traces its beginnings to 2009, when entrepreneur Forrest Li founded Garena to distribute computer games throughout Southeast Asia. Reliable broadband and personal computers were still uncommon in many homes. Garena responded by partnering with cybercafes, placing its software on thousands of machines so customers could play popular online games.
The strategy matched Li's reading of the region. Southeast Asia offers businesses hundreds of millions of consumers, yet crossing its national borders is difficult because infrastructure varies widely and the region is divided by geography and language. Garena grew by working around those barriers.
Li soon saw a far bigger opening in online retail. He launched Shopee in 2015, offering independent sellers a website and app for clothing, cosmetics, household goods, and other products. The platform first focused on small merchants selling cheap everyday items. Buyers could message sellers directly, and promotions, games, and rewards brought them back. The idea caught on, but finding customers and building the delivery network needed to serve them demanded enormous sums of money.
Garena then gave Sea the financial lift it needed. In 2017, the company released Free Fire, built for inexpensive smartphones and unreliable internet connections. Its audience eventually grew beyond 100 million daily players. The game cost nothing to download, while players paid for virtual items - sales that produced substantial profits without the expense of making and shipping physical products. Free Fire supplied Sea with cash to pour into Shopee.
Sea Limited's rise - and the setback that followed
Then Covid arrived. Lockdowns kept people at home, where many spent more time gaming and buying things online. Sea Limited's two businesses gained enormously from that shift. With interest rates low, investors also poured money into rapidly growing tech companies, including those still losing money.
Sea moved quickly. Shopee cut delivery costs for customers, paid merchants to join, and poured money into advertising. It entered India, Europe, and Latin America while developing a delivery network of its own. Investors supplied billions, including almost £6 billion raised through a share and bond issue in 2021. With that cash available, Sea could chase expansion without paying much attention to profits. By late 2021, investors saw Shopee as a likely market leader. That strategy, though, relied on continued funding and income from gaming.
The reversal was brutal. Inflation surged in 2022, pushing interest rates higher and making investors far less willing to fund businesses that were losing money. Once pandemic restrictions ended, gaming also declined. Then India banned Free Fire on national-security grounds, cutting off one of the game's largest markets.
Sea Limited's gaming profits weakened, while Shopee continued to post heavy losses and investors lost confidence. The company could no longer justify spending so heavily on the promise of future profits. Li moved quickly: Shopee pulled back from much of its international expansion, thousands of employees lost their jobs, and the company cut spending and reduced subsidies. Sea then focused on turning its remaining businesses profitable.
It worked: Sea reported its first quarterly net profit in early 2023. The result marked a sharp turnaround. Shopee had relied heavily on subsidies to draw in buyers and merchants, and its retreat revealed how badly the company had misjudged the pandemic expansion - especially in markets where it had little established advantage. Li, however, cut the losing investments instead of pouring more money into them.
Sea is a different beast now
Sea Limited has changed markedly. Group revenue climbed 36% in 2025, reaching £22.9 billion, while net profit came to £1.6 billion. Shopee processed £127.4 billion in merchandise, almost 27% above the previous year. That size gives Sea ways to improve earnings without returning to the pandemic-era spending spree. Merchants can pay for product advertising on Shopee, and higher delivery volumes should distribute logistics costs across more orders. Those gains could push profit growth ahead of sales growth. E-commerce still has plenty of room to expand across the region, and Shopee's delivery network may be hard for smaller competitors to replicate.
Sea Limited (NYSE: SE) share price chart
Sea's third business, Monee, began in 2014 as a payment service for gamers without bank accounts who wanted to buy digital products. It has since expanded into lending and other financial services for consumers and small businesses. Shopee already sees how much merchants sell and how often customers purchase. Monee could use that record to evaluate borrowers that conventional banks often overlook.
Risks remain. TikTok Shop and Lazada are locked in fierce competition, and Monee lends to people who may not repay. Garena, meanwhile, still relies heavily on Free Fire; its popularity may not last forever. Li has adapted before, building substantial businesses in markets with plenty of room to grow. Sea's bigger opportunity now lies in earning more from the customers and infrastructure already in place. If Li keeps that discipline, the company could post profitable growth for years.
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