Razer Is Said to Target an IPO at Up to $5 Billion Valuation

Razer Inc. is shooting for a Hong Kong initial public offering that could value the gaming gear maker at as much as $5 billion and help fund development of its own mobile phone, people familiar with the matter said.

The company -- which makes accessories from mice to laptops that bear a green tri-headed snake -- is developing a mobile device tailored for its consumer base of hardcore gamers, according to the people. Razer’s share sale, which will give it ample ammunition to develop new gadgets, will seek to value the company at $3 billion to $5 billion, the people said, asking not to be identified talking about internal plans. It aims to list around October, the people said.

Razer, which sells products online and in chains like Best Buy across the U.S., has said it wants to use Hong Kong as a beachhead from which to accelerate its expansion into China’s $25 billion gaming market. The company now sells its product there via e-commerce giants JD.com Inc. and Alibaba Group Holding Ltd., co-founder Tan Min-Liang said in an interview in June. It’s sold $1 billion worth of product globally in the past three years, Tan added. 

Razer’s IPO would be one of the largest tech debuts in the Asian financial center in years. The company, co-founded in 2005 by Singapore-born Tan, considered a U.S. IPO as far back as 2014, people with knowledge of the matter said at the time. In October the same year, the company was valued at $1.5 billion, according to data from researcher CB Insights. The company declined to comment on its IPO plans in an email on Wednesday.

The company, whose backers include Intel Corp. and a unit of Temasek Holdings Pte, counts gaming hardware as its main source of revenue but is also developing a virtual currency called zGold and building up its community. Razer, which sponsors more than 300 eSports athletes, is building a software platform that connects and launches games for some 35 million users.

The global video games industry is expected to grow by about 25 percent to $146 billion in 2020 from an estimated $117 billion this year, according to data from Euromonitor International. The Asia-Pacific market, however, is slated to expand by a much faster 39 percent to $65.3 billion over the same period, driven by 40 percent growth in gaming software alone, the data show. The comparable hardware market is expected to expand 22 percent.