RAZER USA LTD.
CEO: Min-Liang Tan.
Financial information: Secured
$50 million in a first round of venture capital funding.
No. of employees: Approximately 400 worldwide.
Investors: IDG-Accel and private individuals.
Headquarters: Carlsbad.
Year founded: 1998.
Company description: Razer is a leader in high-performance gaming hardware. Used by the most demanding professional gamers who compete in global tournaments, Razer provides gamers with the advantage of cutting-edge technology and award-winning design.
Key factor for success: No-compromise attitude toward designing products for gamers.
Carlsbad-based video gaming hardware company Razer USA Ltd. recently secured $50 million in a first round of venture capital funding led by global investment fund IDG-Accel China Capital Fund. The fund, launched in 2005, is a joint venture between Accel Partners and IDG Technology Venture Investment Inc.
Before this investment, funding had been contributed by angel investors as well as through Razer’s global operations, the company said in a Dec. 20 statement announcing the venture funding.
Founded in 1998, Razer develops and designs gaming peripherals and related hardware such as mice, keyboards, headsets and the Razer Blade Gaming Laptop. Some of its latest accessories are designed to tie in with the “Battlefield 3” video game, as well as “Star Wars: The Old Republic.”
“We took a long time raising our first VC round as games like ‘Battlefield 3’ kept us pretty busy recently,” said Min-Liang Tan, co-founder and CEO of Razer. “More importantly, we took our time selecting an institutional investor as we wanted to find a partner that understood our commitment to gaming and our no-compromise attitude to designing products.”
Along with plans to invest in technology, Razer says the funding will allow it to reinforce its design capabilities and accelerate product rollout. The company will focus on investing significantly into research into its user interfaces for gaming, augmenting its user interface research teams based in three design centers and one technology center worldwide. Additionally, the company says it intends to expand its range of systems.
“The Razer Blade was very well received globally and we intend to focus on innovating with more gaming systems now that we have a bigger war chest for R&D,” a Razer statement says.
Global Reach
With offices in nine cities around the world including San Francisco; Hamburg, Germany; Seoul, South Korea; Shanghai; and Singapore, the company says it has been recently ranked as one of the top technology brands in China and maintains strategic partnerships with the largest Chinese gaming companies such as Tencent, Shanda, ChangYou.com Ltd. and Perfect World Inc. Tan said IDG-Accel is a global fund whose relationships in the U.S. and China will be complementary to Razer’s worldwide business.
“Given our global reach, we wanted an institutional partner who didn’t just provide funding but could also help us scale,” said Tan. “IDG-Accel is a global fund and their relationships in the U.S. and China will definitely be complementary for our worldwide businesses.”
Marco Thompson, managing director with Carmel Valley-based venture capital company Express Ventures, said $50 million is a large chunk of capital in the venture business that displays a huge vote of confidence in the future of the company.
“Before an investor makes an investment of that size they would do all the research and diligence in the market to understand their promise,” Thompson said. “This would speak volumes about their view of Razer’s gaming status.”
It’s particularly unusual for an investment of that size to be made in a consumer products company, he added, when the trend for investments today is toward life sciences, software and the wireless industries.
“This is one of the largest investments in a hardware-related company in San Diego that I can remember,” he said.
Under the Radar
Although admittedly unfamiliar with Razer’s business plans, Thompson speculates this money could be useful in propelling the company’s growth in several directions. Among them is financing product manufacturing in China and shipment for U.S. distribution. Other potential job generators that would be lucrative for the company are investing in marketing, from Internet- and social media-based promotions to traditional print, radio and television advertising, and expanding research and development in areas such as circuit design and software development.
Kevin Carroll, regional vice president of the high-tech industry trade group TechAmerica, formerly known as the American Electronics Association, said the venture funding speaks to Razer’s place in the video gaming industry and the size of the industry itself.
“As a region we need to find a way to pay more attention to these companies,” Carroll said. “They really fly under the radar.”
