Synagie should grow, not sell its e-commerce business

TWO years after it raised nearly S$10 million in an initial public offering, and just eight months after it raised another S$3.8 million from a rights issue, e-commerce services provider Synagie Corporation wants to sell its e-commerce business. The proposed deal will deprive Synagie's shareholders of a business that has only just turned profitable, and will instead leave them holding an insurtech startup that is still loss-making.

In August, Synagie announced that it had managed to turn its first profit since its 2018 listing. For the half year to June 30, the company reported earnings of S$4.1 million - a reversal from its S$3.7 million loss in the year-ago period. Revenue had more than quadrupled to S$38.3 million, from S$9 million a year ago, led by contributions from its e-commerce segment.

Synagie is just the sort of company that could be expected to do well during the Covid-19 pandemic. It sells body, beauty and baby (BBB) products online, and provides marketing support services to brands - mainly those in the fast-moving consumer goods (FMCG) industry.