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Simon Huang · · 5 min readRyde IPO: Investors should buckle up for a bumpy ride
Ryde, a Singapore-based mobility and quick commerce platform, filed a Form F-1 with the US Securities and Exchange Commission last month. It seeks to raise up to US$17 million by listing on the New York Stock Exchange.
The company was founded in 2014 by Terence Zou, who serves as its chairman and CEO.
Ryde chairman and CEO Terence Zhou / Photo credit: Tech in Asia
Earlier this year, Ryde raised US$2 million from Octava, a family office.
It also acquired Meili Technologies, a last-mile logistics service provider in Singapore. According to Ryde, this would enable it to expand its quick commerce service RydeSend, through which ecommerce and F&B businesses can deliver packages in under 50 minutes.
These are our key takeaways from the filing.
1. Revenue growth supported by membership fees and ads
Ryde’s revenue for 2022 was 42% higher than the previous year.
The pace of growth is comparable to the mobility business of its competitor Grab, which recorded a 40% increase in revenue over the same period, albeit from a much higher base.
However, Ryde’s revenue mix indicates that its mobility segment, which includes service fees paid by drivers and consumers for use of its platform, grew at a much slower pace of 7%.
Instead, the increase in revenue between 2021 and 2022 was driven mainly by membership subscription fees paid by consumers for its Ryde+ service – which grew 29x – as well as advertising fees it received for ads displayed in its app and website.
2. GMV declined despite increased incentive spend
Other operating metrics suggest bumpy times ahead for the company.
Ryde’s 2022 gross merchandise value (GMV) – which represents the total dollar value of transactions facilitated through its services – fell by 11% from the year before, driven by a 30% decline in the number of transactions on the platform.
This was notwithstanding an increase in spending on driver and consumer incentives by 10% and 145%, respectively, over the same period.
On the other hand, the number of unique active drivers and consumers on the platform went up between 2021 and 2022.
3. Revenue growth outpaced by increase in losses
4. Ryde only has 2.5% of Singapore’s mobility market
5. Less than one year of runway
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Ryde says it wants to be a “super mobility app” but its financials and operating metrics suggest that this will be a tall order.
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