Razer doubles down on Southeast Asia and payments with acquisition of MOL

Published April 23, 2018

Gaming hardware maker Razer, which went public in a big IPO in Hong Kong last year, is doubling down on payments after it announced a deal to acquire MOL, a company that offers online and offline payments in Southeast Asia.

Razer made an initial $20 million investment in MOL last June to supercharge its zGold virtual credit program for gamers by allowing them to buy using MOL’s online service or its offline, over-the-counter network of retailers that includes 7-Eleven. Now Razer aims to gobble up MOL in full by acquiring the remaining 65 percent, which will allow it to grow its alternative revenue streams by pushing fully into payment services by merging MOL’s virtual payment platform with zGold.

It’s worth noting that the deal is an intention to buy MOL. It’ll be subject to review from shareholders, but Razer said it has already secured support from major shareholders. The transaction gives MOL, which delisted from the Nasdaq in 2016 following a bumpy two-year spell, the same $100 million valuation it held for the initial Razer investment.

The acquisition will boost Razer’s recently announced online games store, which rivals services like Steam, but first and foremost it is focused on growing the firm’s share of online sales in Southeast Asia’s growing e-commerce and payment space. To that end, Razer recently launched a store on Lazada, the Alibaba-owned e-commerce service in Southeast Asia, something that Apple did earlier this year.

“We are already the No. 1 gaming brand in the U.S., Europe and China, but Southeast Asia is still nascent and a very small part of our business,” Razer CEO and co-founder Min-Liang Tan told TechCrunch in an interview. “We see this [deal with MOL] as stuff we can do immediately.”

Tan said that, in particular, working with MOL saw revenue grow “dramatically” while MOL itself surpassed $1.1 billion in GMV across its payment network last year.

“This is the perfect opportunity for us to not just be a minority shareholder, but to combine the business and continue scaling from here,” he added, reiterating that he believes the deal gives Razer the world’s largest virtual credit system for gamers based on user registrations. “That’s a huge opportunity for us.”

Away from its core business, the push will also help Razer in Singapore where it has applied to develop a unified e-payment system that would be used across the country, which is the Razer CEO home nation.

Tan said he has kept an ongoing dialogue with regulators, adding that he believes this deal “makes it clear that we don’t just have the scale, we also have the right technology.”

Beyond the Singapore opportunity, where Razer is a new entrant and thus considered an outsider for the license, Tan said the focus is on enabling cash-less payments right across Southeast Asia.

The blockchain has been widely touted as a building block that can help develop financial inclusion platforms in emerging markets, but for now Razer isn’t talking about whether it will hop on that wagon.

“We are excited about blockchain and the technology it brings, but we don’t have anything to comment on at this juncture,” Tan said.

The Razer chief was more vocal on the company’s wider goal, which he said is to develop “an entire ecosystem for our games partners.” The goal is to offset Razer’s impressive hardware sales business by constructing services that span game payments, game distribution and analytics on gamers and their behavior.

That optimism isn’t shared right now by investors in Hong Kong, however, which lured Razer as part of a push to attract more tech listings. Despite a surge when it when public in November, the stock traded at an all-time low of HK$2.44 today, down from its initial list price of HK$3.88.

Tan said he is focused on growing the business and its services regardless, but he did admit there’s a need for “the Hong Kong investment public to be more educated on tech companies.”