Suddenly, profitable startups look sexy. Here’s a list.

Dear Readers,

These days in tech, profitable startups are looking very sexy, thanks to WeWork, Adam Neumann, and SoftBank. 😘 But to people outside of the tech and startup community, it must have been so amusing to see that most industry insiders are only now starting to realize that turning a profit is critical to the survival of any business.

Becoming a unicorn doesn’t really mean anything anymore. We know that all too well at Tech in Asia: Whenever the subject or headline says “unicorn xyz,” for example, the click rate isn’t as high as we’d hoped. I think it’s a sign that readers are sick of the term, too.

So instead of “unicorn,” folks are coming up with different terms to more accurately differentiate companies with high valuation from businesses that have a healthy P&L. The most recent one that has been circulating is “rhinoceros.” 🦏 As Nick Nash, co-founder and managing partner of Asia Partners, puts it: “It’s got a horn, but it is worth US$1 billion in a P/E [price-to-earnings] multiple, not on a revenue multiple.”

Photo credit: Geran de Klerk /Unsplash

In our quick chats with founders, I learned that startups big and small are taking steps towards being profitable. To me, that’s a good indication that the community is becoming wiser and more responsible. And for companies, perhaps it’s also an exercise in managing scale – being or staying lean and mean ahead of an impending global financial downturn is probably a smart move.

At Tech in Asia, we always make sure to ask founders if the business is profitable. Here’s a list of companies we covered in 2019 that were in the black at the time of our coverage:

Wego – The online travel search and booking platform became profitable over a year ago, and hit a milestone of US$1 billion bookings in 2018. Read more.

M-DAQ – In 2018, it hit full-year profitability for the first time. It handled US$4.8 billion in transaction volume during the same period, resulting in a revenue of US$31 million. Read more.

Yeah1 Group – In 2018, it reported net revenue of US$71.2 million – almost double from the previous year. It’s been profitable for four straight years, with its net profit jumping from US$620,000 in 2015 to US$7.7 million in 2018. Read more.

Tribecar – Membership rose by almost 50% in the past year, and its revenue also grew by 50% within the same period to about US$5.50 million. Read more.

Singapore Life – It was profitable in 2018 – its first full year of operations – but it didn’t reveal more details. Read more.

Dltledgers – The startup is profitable, according to founder Samir Neji. At present, it caters to 340 traders and has partnerships with more than 30 banks. To date, it has conducted US$1 billion worth of trades. Read more.

Ritase – It charges a fee for every transaction made through its platform, and co-founder Iman Kusnadi claims it’s profitable. The startup has a pool of more than 7,500 trucks from around 500 trucking companies, serving about 150 business customers and facilitating 50,000 transactions per month. Read more.