Gaming unicorn Razer to launch corporate VC fund next year

Visual of Razer portal. November 2015.

US-based high-end gaming hardware designer Razer is planning to launch a corporate investment fund targeting venture capital (VC) investments in 2016. Last year, the firm supposedly reached a billion dollar market capitalisation when Intel made an undisclosed investment in the firm.

A TechCrunch report confirmed with its Singaporean CEO and co-founder, Tan Min-Liang, that the firm was planning to establish a corporate investment arm, though declined to comment on the nature of its investment thesis or the size of its corpus. Tan did explain that it would function as a “global incubator” enabling companies to access Razer’s existing expertise and business.

In an interaction with TechCrunch, Tan shared: “The plan is really to find strategic companies that we can help and [that can] leverage off of our profile. We’re really globally covered… and can pretty much [assist them] before they even move into new geographies or jurisdictions.”

According to Tan, Razer’s revenues are split evenly between North America, Europe and Asia. It manages its business operations from 10 global offices and maintains relationships with manufacturing partners and other corporate likes Intel and Tencent. Games and game-related businesses have obvious synergies, but hardware in general is a category that interests Tan, according to TechCrunch.

Razer intends to release more news in relation to the fund in 2016, when it comes online and begins making investments. sometime in 2016. However, no new information regarding an initial public offering (IPO) was forthcoming, with Tan declining to comment. This is despite reports that emerged last year of Razer considering an IPO.

Citing high profile Kickstarter projects that exhausted their financial reserves in his interaction with TechCrunch, Tan noted that the hardware business is a difficult sector, opining that Razer possesses the necessary experience, networks and expertise to assist young and upcoming firms to build their ventures into sustainable businesses. This is despite developments in the hardware space that have eased pressures on early-stage hardware startups.

He explained to TechCrunch: “We can tell portfolio companies that this is what we learned in this jurisdiction. For example, here’s our European sales manager and they can talk to him. He’s not going to help you do your work, but he’s sure as hell going to take you 70 percent of the way there by telling you what the pitfalls are. We’ve got people on the ground who have been doing the exact same work [for years].”

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Future direction

Mainland Chinese smartphone manufacturer Xiaomi  routinely invests in promising hardware companies and grants them access to its business network and sales platform to aid in spurring their development. This also enables Xiaomi to expand its product offerings as well.

The likely directions for Razer’s corporate fund are virtual reality and consumer hardware like wearables built by Internet of Things (IoT) startups, given their relevance to the core competencies of Razer as a business entity. The hardware vertical is also an extremely promising sector, as of 2015. The melding of data and hardware is forcing an evolution of business models amongst hardware manufacturers, designers and entrepreneurs.

In a statement to The Peak in an August 2015 feature, Tan stated: “We are the fathers of the whole gaming-peripherals industry. The things that I wasted most of my time on in my youth have probably become the most constructive for me today. I don’t believe that anything is a waste of time.”

Building up and scaling hardware startups is not as difficult as before, with this fund launch occurring in the context of increasing investment into the hardware space as a whole. This is in conjunction with this are developments that are lessening the difficulties faced by the founders of hardware startups.

Virtual reality (VR) will also emerge as another element, given that Tan is a founding member of the Open Source Virtual Reality (OSVR) platform, which TIME referenced as a potential competitor to the Oculus Rift.

OSVR is targeting the creation of a common standard for VR programme design, with more than 120 partners, inclusive of 20 to 50 universities and colleges. Tan states his hope to build the foundations of a VR industry, with robust market potential when applied to entertainment, healthcare and military applications.

Tan’s personal interest in sustainable energy and transportation (e.g. space flights), may also influence the investment strategy and direction of Razer’s corporate fund, as well as recent developments in relation to India.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.