Why the Scottish Mortgage Investment Trust owns Sea Ltd

On Shopee Live in Indonesia, owned by Singapore’s tech giant Sea Ltd, shopping is part game show, part community event.

One evening in central Java. Zarah, an Indonesian merchant, props up her phone on a stack of shoeboxes, opens up the Shopee Live app and taps ‘Go live’. She starts with a smile, a wave and a quick poll for her viewers: floral or plain?

Hearts drift up the screen as she styles a floral scarf. Questions about size, shade and fit arrive in real time. Then, confetti bursts across the stream. A spin-the-wheel game starts, awarding vouchers that expire within seconds.

Orders flow through the chat without buyers leaving the broadcast. Some pay upfront, others in instalments, approved almost instantly.

Logistics and operations

After orders are placed, Sea’s logistics arm gets to work. The company’s network threads together an archipelago stretching more than 5,000km from the Indian to the Pacific Ocean.

A moped courier collects Zarah’s parcels and a truck takes them across Java. A plane or boat bridges the islands and another moped handles the last mile. The challenge is not just speed but low-cost precision in messy reality.

That is Sea’s edge. Complexity across Southeast Asia is not a problem, but an advantage to build on.

It’s an advantage founder Forrest Li is driving hard to reinforce.

The three acts of Sea

The Scottish Mortgage Investment Trust first invested in Sea in early 2024. The company operates across Southeast Asia, Taiwan and Brazil.

What sets Sea apart is not only the growth of those markets but management’s ability to build several large businesses at once. Today, three acts are playing out at continental scale.

The first act was gaming. Sea began by publishing, then creating, games built for modest Android handsets running on patchy bandwidth.

File sizes, modes, and artwork are optimised for low processing power and memory usage. Content is carefully localised, so skins, emotes and events feel native in Jakarta, Manila, Hanoi and Kuala Lumpur.

Collaborations with musicians, football franchises, and holiday promotions have kept games such as Free Fire fresh, helping it become the world’s most downloaded game and a source of cash that has funded Sea’s other acts.

The second act is Shopee. Unlike many rivals, it was not built as an Amazon clone.

Shopee grew up mobile-first and entertainment-led. Livestreams, chat, mini-games and a personalised feed make the app feel more like a bazaar than a catalogue.

Discovery and advertising are woven in, with a focus on low-priced goods that meet the needs of price-conscious consumers.

Over time, Shopee brought logistics in-house. That has lowered delivery costs, improved speed and created an infrastructure advantage.

The result is strong market positions: roughly 50% share in Southeast Asia and second place in Brazil behind MercadoLibre. Yet e-commerce penetration in Sea’s markets is still well below China’s, leaving ample room for growth

The third act is financial services. Sea has built an infrastructure around the digital wallets used on Shopee, adding buy-now-pay-later credit, off-platform cash loans for consumers and working capital for merchants.

In a region where many people remain underbanked Sea’s moves are helping it to become one of the most valuable financial services platforms in Southeast Asia.

The competitive advantage

For the Scottish Mortgage Investment Trust, Sea’s appeal lies in how its capabilities reinforce one another. Gaming generates cash and engagement, while e-commerce builds buying habits.

These transactions create data that supports lending, while credit increases purchasing power. Greater scale makes logistics more efficient, creating a compounding system of users and capital.

There may yet be a fourth act, but without one, Sea already exhibits the qualities seen in exceptional companies: multiple businesses, each strengthening the next.

Important information

This article does not constitute, and is not subject to the protections afforded to, independent research. Baillie Gifford and its staff may have dealt in the investments concerned.The views expressed are not statements of fact and should not be considered as advice or a recommendation to buy, sell or hold a particular investment. Investments with exposure to overseas securities can be affected by changing stock market conditions and currency exchange rates. Scottish Mortgage invests in emerging markets where difficulties in dealing, settlement and custody could arise, resulting in a negative impact on the value of your investment. Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). The investment trusts managed by Baillie Gifford & Co Limited are listed on the London Stock Exchange and are not authorised or regulated by the FCA. A Key Information Document is available at bailliegifford.com