VC-backed gaming company Razer files for Hong Kong IPO
Razer, a manufacturer of gaming peripherals such as headphones, joypads and mice, has filed for a Hong Kong IPO. The company, which was co-founded by a Singaporean but is based in the US, has numerous venture capital backers.
The filing gave no indication of the size or pricing of the offering. Razer’s most recent funding round in May – led by Horizons Ventures, a VC firm controlled by Hong Kong tycoon Li Ka-Shing – reportedly valued the company at close to $2 billion. As part of that deal, Razer entered into a strategic alliance with Three, a Hong Kong-based mobile phone carrier controlled by Li’s Hutchison Whampoa.
Razer was established by ex-lawyer Min-Liang Tan and Robert Krakoff in 2005 and it initially had dual global headquarters in California and Singapore. Its hardware devices – of which the company has sold more than 25 million to date – are intended to provide gamers with a competitive edge and immersive experience. Razer also has a software platform with over 35 million users as of May 2017.
The company’s target market is a global community of active gamers estimated to number 2.1 billion in 2016, according to Newzoo. It is expected to reach 2.7 billion by 2021. The global gaming peripherals market generated revenue of $2.2 billion last year, while the gaming systems market was worth $19.3 billion.
Razer issued six rounds of preferred shares between 2007 and 2017. Investors include IDG Capital – through China-focused IDG-Accel Capital Fund II – Temasek Holdings, Binary Capital, the family office of Formation 8 co-founder Joe Lonsdale, and an investment entity controlled by the founder of Indonesian conglomerate Djarum Group, as well as Horizons Ventures.
There are also strategic backers such as Taiwan’s Foxconn Technology Group, Intel Corporation, Chinese electronics manufacturers BYD Electronic and Digital Grid, and an investment arm of Chinese industrial parks developer Hanfor Group. The percentage holding of each investor has not been disclosed.
Razer generates more than half of its revenue from the Americas, with Asia accounting for 22.9%, including 12.7% from China. The company posted revenue of $392.1 million in 2016, up from $319.7 million the previous year. However, its net loss widened to $59.6 million from $20.4 million over the same period.
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