Buyer beware: Are investors in Ryde's IPO in for a rough ride?

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- Written by Simon Huang Journalist Hello {NAME} The successful listing of Arm Holdings (ARM, NDAQ) may herald a thawing of the IPO market in the US. Other tech players hoping to follow in Arm’s footsteps include delivery company Instacart and marketing automation platform Klaviyo. While the market for big IPOs may be unfreezing only now, there have been plenty of smaller IPOs in the US throughout the year, including a number of Southeast Asian tech firms. Ohmyhome (OMH, NDAQ), a Singapore-based proptech platform, listed in March, while its peer Simpple Ltd. (SPPL, NDAQ) has just raised US$8 million. And of course, who can forget VinFast (VFS, NDAQ)? At one point, the Vietnam-founded firm became the third-biggest automaker globally by market capitalization. However, these firms are not without their skeptics. For instance, Ohmyhome and Simpple are small companies that generated revenue worth under US$10 million in 2022. Add Ryde, a Singapore-based tech platform in the mobility and quick commerce business, to this list. As I highlight in this week’s Big Story, its revenue in 2022 did go up by 42% compared to the previous year, but this hides a much slower 7% year-on-year growth in its mobility segment. The company is also facing slowing gross merchandise value and transactions as well as widening losses. Long-term fundamental investors may give these companies a wide berth for now, but that doesn’t mean that one cannot make money from trading in their shares. As with meme stocks, many of these companies’ shares offer volatility to the brave of heart. -- Simon  ---------------------------------------------------------------  THE BIG STORY [Ryde IPO: Investors should buckle up for a bumpy ride]( Ryde says it wants to be a “super mobility app,” but its financials and operating metrics suggest that this will be a tall order. ---------------------------------------------------------------  3 TRENDS TO KEEP EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Son on the rise: UK-based chipmaker Arm Holdings [jumped 25%]( on its first day of trading, validating the decision by SoftBank (9984, TYO) and its founder Masayoshi Son to pursue an IPO in the US at a time when investor demand for fresh listings was uncertain. A big pop in shares on the first trading day makes for great headlines. But it is typically not good news for those who sold out in the IPO because it implies that the sellers could have secured a higher price. However, since SoftBank only sold 10% of Arm and still owns the balance, the halo of a successful IPO will ultimately benefit the Japanese tech conglomerate, which has other tech companies in its stable that it wants to take public. It’s not just SoftBank and Son who stand to gain from the success of Arm’s listing. The whole tech ecosystem as well as the bankers and lawyers who bring these companies to market also win. 2️⃣ All hail the regulator: The Land Transport Authority of Singapore (LTA) [announced]( a review of the point-to-point industry that will focus on the supply of taxi and ride-hailing services. The LTA specifically mentioned improving the stability of supply at certain times of the day such as late evening, when shortages can often occur. Operators “must be able to provide these services with minimal disruptions and downtime,” the regulator said. Although it’s unclear what the LTA will suggest and what it can do to enforce these recommedations, the market seemed to take a dim view of the news. Shares of Grab (GRAB, NDAQ), the no. 1 player in Singapore’s mobility market, [slid by 8%](. It’s a timely reminder that even a dominant market position and the benefits of scale don’t offer protection against everything. Indeed, these may even heighten the prospects of risks like government intervention. 3️⃣ A hero lies in you: Delivery Hero (DHER, DE) is “doing better than ever” and has achieved breakeven despite poor market sentiment that has sent its shares down by 30% so far this year, co-founder and CEO Niklas Östberg said. In a letter to employees, he reminded them that in the short term, a share price is like a “voting machine” - its price could easily be 10x to 20x higher if employees focus on making customers happy and the company achieves its long-term ambitions. Issues such as slowing growth, continued inflation, and competition in markets like Korea and the Middle East also need to be dealt with. As the industry consolidates, it will be interesting to see what Delivery Hero decides to do with Foodpanda, which operates in many emerging Asian markets including Pakistan and the Philippines.  2 EYE-POPPING NUMBERS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [US$100 million]( The amount that a flagship fund launched by Thailand’s Kasikornbank (KBANK, BKK) will invest in AI, Web3, and deeptech startups focused on financial services. - [US$4 billion]( The value of a fabrication plant opened by US semiconductor manufacturer GlobalFoundries (GFS, NDAQ) in Singapore as part of its efforts to expand its supply chain. THE ONE YOU DIDN'T SEE COMING We spotlight the story that had everyone talking and social media buzzing during the past week. Not that simpple?: Proptech company Simpple raised [US$8 million]( from its IPO this week. It plans to use the proceeds to boost R&D, implement its IP strategy, expand into overseas markets, and make acquisitions and strategic investments. The company’s revenue in 2022 was [US$4.9 million]( up by 55% from 2021. However, it went from making a small profit from operations in 2021 to losing US$700,000 last year. Operating primarily in Singapore, Simpple helps building owners and managers run their facilities by automating workflow processes as well as providing software and robotic solutions for cleaning and security. Unlike consumer-facing firms, companies like Simpple are not household names. Indeed, Tech in Asia admits to not having heard of it until news of its IPO broke. But serving prosaic niches such as handling maintenance for academic institutions can also be a way to make money. That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice. [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894