Coinbase

Sea Group

Coinbase

Coinbase makes money from transaction fees. Every time someone buys or sells crypto on the platform, Coinbase takes a cut — typically around 1.5% for regular users, lower for high-volume traders on its advanced trading tier.

For a company that processes billions in daily volume, that adds up fast. In the 2021 bull run, Coinbase generated $7.8 billion in revenue.

Beyond trading fees, Coinbase earns revenue from staking (users earn yield on their crypto, Coinbase takes a commission), USDC interest (Coinbase co-created the USDC stablecoin with Circle and earns interest on the reserves), custodial services for institutions, and its cloud platform for developers building on-chain apps.

Sea Group

Sea runs three distinct businesses under one roof, and the genius of the structure is how they feed each other.

Garena is the gaming division. It develops and publishes games — most famously Free Fire, which Sea built itself after years of just licensing other people's games.

Free Fire launched in 2017 and became a phenomenon in emerging markets. It's a battle royale game optimized for low-end Android devices and slow internet connections.

Exactly the phone most people in Southeast Asia, Latin America, and India actually own. Garena makes money through in-game purchases — skins, characters, seasonal passes.

At its peak, Free Fire had over 100 million daily active users.

Shopee is the e-commerce marketplace. It operates like a hybrid of Amazon and eBay — sellers list products, buyers purchase, Sea handles payments, logistics coordination, and marketing.

Shopee makes money through advertising, transaction fees, and value-added services for sellers. It's now the dominant e-commerce platform in Southeast Asia and has a significant presence in Brazil.

SeaMoney is the fintech arm. It offers mobile wallets, digital payments, buy-now-pay-later, and banking services through MariBank in Singapore.

The pitch is simple: hundreds of millions of people in Southeast Asia are unbanked or underbanked. Give them a mobile wallet tied to their Shopee account and they'll use it for everything.

It's the super-app play, executed patiently.

Coinbase

Brian Armstrong was working as a software engineer at Airbnb in 2010 when he read Satoshi Nakamoto's Bitcoin white paper. He became obsessed.

At the time, buying Bitcoin meant navigating sketchy exchanges, wiring money to anonymous accounts, and hoping your coins didn't get stolen. Armstrong thought: this is never going mainstream unless someone makes it dead simple.

In 2012, Armstrong got into Y Combinator and co-founded Coinbase with Fred Ehrsam, a former Goldman Sachs trader. Their pitch was straightforward — be the easiest, safest, most regulated way to buy and sell Bitcoin.

While other crypto exchanges were operating in legal gray areas, Coinbase went out of its way to get money transmitter licenses in every US state. It was slow and expensive, but it meant Coinbase was the one exchange your bank wouldn't block.

The first version was bare-bones. You linked your bank account, bought Bitcoin, and Coinbase held it for you.

That custody model — Coinbase holding your crypto — was controversial with crypto purists who preached "not your keys, not your coins." But for normal people who didn't want to manage private keys, it was exactly what they needed.

Sea Group

Forrest Li moved from China to Singapore in 2005 to do his MBA at Stanford. He didn't go back.

In 2009, he founded Garena — which literally means 'Global Arena' — as an online gaming platform for Southeast Asia. The region was massively underserved.

Hundreds of millions of young, mobile-first users with low PC penetration but exploding smartphone adoption. Nobody was building for them.

Li saw that gap and went straight at it.

Garena started by licensing popular PC games — League of Legends, FIFA Online — and localizing them for markets like Indonesia, Thailand, Vietnam, and the Philippines. It was a straightforward licensing model, unglamorous, not the kind of thing that gets TechCrunch headlines.

But it worked. Garena quietly became the dominant gaming platform across Southeast Asia.

The company rebranded to Sea Limited in 2017 when it IPO'd on the New York Stock Exchange, raising $884 million. By then, Li had already launched Shopee in 2015 — an e-commerce marketplace — and SeaMoney, a digital payments and financial services arm, was taking shape.

Three businesses. One holding company.

The bet was that gaming would fund the others until they could stand on their own. That's exactly what happened.

Coinbase

Coinbase grew with the Bitcoin price cycle. Every bull run brought a wave of new users who heard about crypto from the news or their friends and Googled "how to buy Bitcoin." Coinbase was almost always the first result.

The company spent heavily on brand advertising including a legendary Super Bowl ad in 2022 that was just a bouncing QR code — it crashed the app from the traffic surge.

The regulatory strategy was the long game. While Binance and FTX grew faster by ignoring regulations, Coinbase spent years and millions getting licensed.

When the regulatory crackdown came, Coinbase was the last exchange standing. Being "the regulated one" went from a competitive disadvantage to the only thing that mattered.

The direct listing in April 2021 was a landmark moment. Coinbase went public via direct listing at a $85 billion valuation — the largest direct listing in history at the time.

It legitimized crypto as an asset class in a way that no Bitcoin price chart ever could.

Sea Group

The counterintuitive move was using gaming to subsidize e-commerce. Most tech companies pick a lane.

Sea used Garena's cash flows — which were enormous when Free Fire was at its peak — to fund Shopee's aggressive, money-losing expansion. They didn't need to raise debt or dilute shareholders to burn cash in new markets.

The gaming division was basically an ATM.

Free Fire itself was a masterclass in product-market fit. Instead of porting a premium game to low-end markets and watching it fail, Sea built a battle royale game from scratch that ran on 1GB RAM Android phones with patchy 3G connections.

The game was optimized for exactly the hardware that 800 million people in emerging markets actually owned. Nobody else was doing that.

Shopee's growth hack was localization taken to an almost absurd degree. They didn't just translate the app.

They hired local teams in every market, ran country-specific campaigns, integrated local payment methods, and partnered with local logistics providers. In Brazil, they ran Shopee-branded motorbike delivery.

In Indonesia, they integrated with hundreds of local courier companies. The playbook was: be more local than the locals.

The final piece was the flywheel. A Garena user downloads Free Fire, spends money on in-game items using SeaMoney's wallet, then starts buying physical goods on Shopee with the same wallet.

Three products, one ecosystem, one user. That's the compounding effect Li was building toward from day one.

Coinbase

The crypto winter of 2022 nearly broke the company. After the collapse of FTX, Luna, and Three Arrows Capital, crypto trading volume fell off a cliff.

Coinbase's revenue dropped from $7.8 billion in 2021 to $3.1 billion in 2022. The stock went from $342 to $35, a 90% decline.

Armstrong laid off 18% of the company in June 2022 and another 20% in January 2023.

The SEC lawsuit was existential. In June 2023, the SEC sued Coinbase alleging that it operated as an unregistered securities exchange.

The lawsuit claimed that at least 13 crypto assets traded on Coinbase were securities. If the SEC won, it could have fundamentally broken Coinbase's business model.

The SEC dropped the case entirely in February 2025, dismissing it with no penalty and no admission that any token was a security.

Revenue concentration is a structural risk. Coinbase's revenue swings wildly with crypto prices and trading volume.

In bull markets, the company prints money. In bear markets, revenue evaporates.

This makes it nearly impossible to plan long-term or maintain consistent growth — Wall Street hates unpredictability.

Sea Group

The post-pandemic collapse was brutal and nearly existential for the stock, if not the business. During COVID, Sea was the perfect story — gaming was up, e-commerce was up, digital payments were up.

The stock hit $372 in October 2021. Market cap touched $200 billion.

Sea was the most valuable company ever to come out of Southeast Asia.

Then the world opened back up. Free Fire's daily active users fell off a cliff as people left their homes again.

Garena had funded the empire, and now the empire's funding engine was broken. Sea lost its license to publish Free Fire in India after the Indian government banned Chinese-linked apps.

India had been a massive market. Gone overnight.

Sea responded by cutting costs aggressively — laying off staff, retreating from markets like France, Spain, Poland, and India where Shopee had expanded without yet reaching profitability. The stock fell from $372 to under $40 by early 2023.

A 90% drawdown. That's not a correction.

That's a reset.

The deeper challenge is structural. Shopee competes with Lazada (backed by Alibaba), TikTok Shop (which has exploded in Southeast Asia), and increasingly with Temu and Shein.

These are not small competitors. TikTok Shop in particular has disrupted the e-commerce landscape in Indonesia and Thailand faster than most analysts expected.

Sea has scale and local knowledge, but the fight for Southeast Asia's e-commerce market is far from over.

Coinbase

Coinbase is the consumer trading platform — buy, sell, and hold 250+ cryptocurrencies. Coinbase Advanced Trade (formerly Coinbase Pro) is the lower-fee, more sophisticated trading interface.

Coinbase Wallet is a self-custody wallet where users control their own keys. Coinbase Prime is the institutional platform for hedge funds, family offices, and corporations.

Base is Coinbase's own Layer 2 blockchain built on Ethereum, designed for cheap, fast transactions. USDC is the stablecoin Coinbase co-created with Circle — pegged 1:1 to the US dollar with over $30 billion in circulation.

Coinbase Commerce lets businesses accept crypto payments.

Sea Group

Free Fire is the crown jewel — a mobile battle royale game with over 100 million daily active users at its peak, built specifically for low-end Android devices in emerging markets. It's been the most downloaded mobile game globally multiple times and remains dominant across Southeast Asia and Latin America despite declining from its COVID peak.

Shopee is Sea's e-commerce marketplace and the business with the highest long-term ceiling. It operates across Singapore, Malaysia, Indonesia, Thailand, Vietnam, Philippines, Taiwan, and Brazil.

It's consistently ranked the most-visited e-commerce site in Southeast Asia. The app includes livestream shopping, local seller tools, Shopee Pay, and Shopee Food in select markets.

SeaMoney — now operating as the financial services umbrella — includes ShopeePay (mobile wallet integrated with the Shopee checkout), SeaBank (a licensed digital bank in the Philippines and Indonesia), and MariBank (a digital bank in Singapore). The pitch is financial inclusion for the underbanked, backed by transaction data from Shopee.

Coinbase

Y Combinator, Andreessen Horowitz, Union Square Ventures, Tiger Global, Ribbit Capital, IVP

Sea Group

Sea went public in 2017 without needing a late-stage mega-round from the usual suspects. But it had institutional backing from early on.

Tencent is the most significant external shareholder — the Chinese gaming giant held a roughly 22% stake at various points, which gave Sea both credibility in gaming and a complicated geopolitical headache as anti-China sentiment grew in Southeast Asia and the U.S.

Naveen Tewari's General Atlantic and other growth equity funds participated in rounds before the IPO. Post-IPO, Sea attracted attention from large institutional investors including T.

Rowe Price, BlackRock, and various sovereign wealth funds drawn to the Southeast Asia growth story.

Masayoshi Son's SoftBank also took a stake — consistent with SoftBank's bet on emerging market consumer internet platforms. The Tencent relationship is the most interesting one because it's both a competitive asset (access to gaming IP and distribution) and a liability (political risk in markets sensitive to Chinese corporate influence).