Spotlighting Castlery’s growing pains

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Expansion is a risky business with potentially great rewards. Companies need to pull off a delicate balancing act to establish themselves in a new market or segment. For example, Singapore-based Castlery successfully navigated local nuances to cement a place in the lucrative US market.

However, the firm’s period of transition and global expansion has come at a cost. Despite tripling revenue during its 2022 financial year, the firm reported a US$9 million loss before income tax.

In today’s featured piece, my colleague Jofie breaks down the numbers from Castlery’s FY 2022 financial statements and uncovers how the company’s significant expansion in the US – its biggest market – has weighed on its bottom line.

Further, the premium story gathers key insights from Castlery co-founder and president Declan Ee on the firm’s profitability targets and how the shift in its financial reporting to a March year-end has played a vital role in accentuating losses.

Today we look at:

• How Castlery booked losses even as revenue tripled
• Why Motion Ventures, a Singaporean VC firm, bets on maritime startups
• Other newsy highlights such as Vietnam’s shrinking startup funding and Bukalapak being slapped with a US $7.3 million court fine in an office project lawsuit

Premium summary

Growing pains

Image credit: Timmy Loen

Due to the varying length of the reporting periods, there’s a somewhat warped comparison of key metrics in Castlery’s financials.

The firm’s FY 2022 covers the 15-month period from January 1, 2021 to March 31, 2022, while FY 2020 covers the 2020 calendar year.

Co-founder Declan Ee shares his interpretation of how the additional three months in FY 2022 affected the furniture firm’s books.

“January to March of each calendar year is seasonally the lowest sales period for the year as well as higher spend as we prep for the year ahead,” Ee tells Tech in Asia. “This 15-month period captured two of such lower revenue and higher expense periods, hence resulting in higher losses.”

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