5 key takeaways from Lalamove’s draft prospectus to list in HK

Lalatech Holdings, the parent company of logistics platform Lalamove, filed a draft of its application to list on the Hong Kong Stock Exchange earlier this week, two years after confidentially filing for an IPO in the US.

The firm’s upcoming public listing follows that of other logistic players like Hong Kong-based GogoX and India-based Delhivery, which went public on their respective local bourses last year.

See also: GogoX and Delhivery: A tale of two logistics IPOs

While Lalatech hasn’t specified the timeline for its public listing or how much capital it aims to raise, Tech in Asia looked at its draft document and here are our key takeaways.

1. Lalamove has a global presence and is in all major SEA markets

Lalamove was founded in Hong Kong in 2013 but operates across the region today. After entering Singapore in 2014, it took four years to grow its footprint in five other major Southeast Asian markets.

Its largest market is mainland China, where it made its debut in 2014. The company also has a presence in Latin America: It launched in Brazil in August 2019 (around the same time as Southeast Asian ecommerce giant Shopee) and Mexico in November that year.

See also: Shopee’s success in Brazil justifies global expansion

Image credit: Timmy Loen

Looking ahead, Lalatech says it will focus on Southeast Asia and Latin America, where it plans to deepen penetration and increase its market share. It also intends to expand to the Middle East.

2. It generated positive operating income in 2022

Lalatech logged a 23% increase in revenue for the year ending December 2022, but the number marked a slowing growth rate, as the firm had a 60% year-on-year revenue growth between 2020 and 2021.

The company’s cost of sales and operating expenses also fell in absolute terms between 2021 and 2022. As a result, the firm eked out a positive operating income of US$2.6 million in 2022, compared to an operating loss of US$661 million in the previous year.

The reduction in operating expenses between 2021 and 2022 was due to a 71% decline in sales and marketing expenses, which fell by US$475 million to US$198 million. Achieving 23% year-on-year revenue growth despite the lower sales and marketing spending is an indication of the business’ long-term sustainability.

3. The firm makes money by charging membership fees and commissions

4. Two is good, but four is better

5. Leaning in on tech