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Ninja Van holding off on IPO plans until profitability improves

Bloomberg • 2 min read
Ninja Van holding off on IPO plans until profitability improves
Lai Chang Wen, CEO of Ninja Van. Photo: Albert Chua/The Edge Singapore
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Logistics provider Ninja Van has put plans for a stock market debut on the back burner, the latest sign of tech start-ups’ struggles with falling valuations across the industry.

The Alibaba Group Holding-backed delivery company is focusing on improving its profitability before going ahead with an initial public offering, chief executive officer Lai Chang Wen told reporters in Singapore on March 18. The company expects to reach positive earnings before interest, taxes, depreciation and amortization in 12 months, he said.

“That in itself is not a strong IPO story,” Lai said. Ninja Van needs “to show that we are a viable profit machine,” he said.

Investors have become more cautious as Southeast Asia’s technology firms including Grab Holdings, Sea and GoTo Group have seen their stock prices plummet. While e-commerce is gaining popularity in the region of more than 650 million people, stiff competition has kept profit margins slim and tech companies have resorted to job cuts as they fight to balance growth and profitability.

Founded in 2014, Ninja Van operates in six markets in Southeast Asia and delivers more than 2 million parcels a day in the region, according to its website. It raised US$578 million ($773.5 million) in a Series E round in 2021 from participants including Alibaba and B Capital Group, the venture capital firm set up by Meta Inc.’s co-founder Eduardo Saverin. The round lifted the company’s valuation to well beyond US$1 billion, Bloomberg News reported earlier.

The company is now considering further fundraising to expand its business and is prepared to accept a lower valuation, Lai said. Ninja Van is steadily moving away from aggressively growing its lower-margin e-commerce business to build logistics capabilities into the business-to-business segment, where it predicts better profitability and less intense competition, the CEO said.

See also: Hong Kong-traded CK Infrastructure, backed by Li Ka-shing, mulls second listing in London

“We shouldn’t be too fussed about valuation,” he said. “The lesson we learned is that the future doesn’t only have to look good, it has to also look defensible.”

Ninja Van’s clients include Alibaba’s Lazada Group and Shopee, a unit of Singapore-based Sea. The logistics startup competes with the likes of J&T Global Express and Shopee’s in-house logistics arm Shopee Express. It also works with global consumer groups such as Crocs Inc. and smaller shops.

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