Singaporean-founded gaming firm Razer files for IPO in HK

Razer chairman and chief executive Min-Liang Tan. Razer could launch its first mobile device later this year or early next year, it said.
Razer chairman and chief executive Min-Liang Tan. Razer could launch its first mobile device later this year or early next year, it said. PHOTO: COURTESY OF RAZER

Preliminary filing shows company has been racking up losses despite a rise in revenue

A preliminary filing by Razer for a listing in Hong Kong shows that theSingaporean-founded gaming tech company has been piling up losses even as its revenue grows. 

Razer, which is based in both Singapore and California, sells premium gaming peripherals like high-precision mice and customisable keyboards in 76 countries. 

Chairman and chief executive Min-Liang Tan, a Singaporean,worked as a lawyer before he founded Razer in 2005.  Although the size of its initial public offering (IPO) remains a secret,Bloomberg reported in April that Razer planned to raise US$400 million (S$551 million) in an IPO in Hong Kong, citing people with knowledge of the matter.

Last year, Razer’s net loss widened to US$59.7 million, from US$20.4 million in 2015, it said in a draft prospectus lodged with the Hong Kong Stock Exchange on Thursday.

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It raked in revenues of US$392 million last year, up from US$320 million in 2015. 

Some of the losses arose from costs incurred when Razer sought an IPO in the United States in 2014.Due to “unfavourable market conditions”, Razer decided in the second quarter of 2015 to suspend its US IPO, the prospectus said.

Razer said its losses may continue as money is ploughed into expansion.

It plans to introduce new products and services to diversify revenue, including those with which it has little or no prior development or operating experience.

Razer could also launch its first mobile device later this year or early next year, it said. Earlier this year, it made key hires and acquired intellectual property from San Francisco-based mobile phone manufacturer Nextbit Systems –founded by former members of Google’s Android team.

Razer plans to support the cloud-based Robin smartphone developed by Nextbit. Last year, Razer spent US$52.2 million on research and development (R&D),across R&D facilities in Chengdu, San Francisco, Shenzhen, Singapore and Taiwan.

Razer has a lengthy shareholder list. Investors include Mr Koh Boon Hwee with a 1.9 per cent stake. Investment vehicle Pi Holdings, which has shareholders such as Mr Wee Ee Chao and Dr Loo Choon Yong, holds a 1.25 per cent stake.

Other backers include Mr Lee Hsien Yang, who is a 0.32 per cent shareholder, while The Hour Glass’ Dr Henry Tay Yun Chwan has a 0.31 per cent stake.

Institutional investors include Li Ka Shing’s Redmount Ventures and Foxconn Technology Group.Razer describes itself as a lifestyle brand for gamers.
“Our most loyal fans have demonstrated their passion for our brand by getting tattoos of the Razer logo,” the prospectus said.

The global games market generated US$101 billion of revenue last year and is the fastest-growing segment in the entertainment industry,
according to a Frost & Sullivan report.

Credit Suisse and UBS are the joint sponsors for Razer’s IPO.

A version of this article appeared in the print edition of The Straits Times on July 01, 2017, with the headline 'S’porean-founded gaming firm Razer files for IPO in HK'. Print Edition | Subscribe