Singaporean

Not Just A Gaming Giant: How Razer's Financial Services Contributed US$64M Of Its H1 2020 Revenue

The COVID-19 pandemic has helped Razer to flourish. Last week, the gaming giant reported a record-high revenue of US$447.5 million with 25.3 per cent year-on-year growth in the first half (H1) of 2020.

Its gaming verticals aren’t the only thing generating profit.

Razer also has a powerful financial arm. The gaming unicorn owns three subsidiaries: Razer Gold, Razer Fintech and zVentures. The group saw a 114.3 per cent increase in total payment volume (TPV) equivalent to US$1.8 billion for H1.

razer singapore
Image Credit: The Esports Observer

Under its financial subsidiaries, Razer has launched a unified virtual currency, a Southeast Asian (SEA) digital payments platform and a corporate capital venture arm.

Razer Gold and Razer Fintech contributed US$64 million in H1 2020, which makes up 14.3 per cent of the unicorn’s total revenue.

With a digital banking license in the works, it looks like Razer may just give superapps like Grab a run for their money in Singapore. Here’s a look at Razer’s lesser-known finance verticals.

zVentures

Razer’s corporate venture capital arm, zVentures, funds startups that contribute to the Razer ecosystem.

Currently, the fund is targeting tech startups expanding into the Internet of Technology (IoT), virtual reality (VR) and e-sports space, among others.

In 2016, zVentures comprised US$30 million (S$41 million) in funds.

Razer founder and CEO Min-Liang Tan estimated that US$100,000 to US$1 million (S$136,000 to S$1.35 million) would be invested per startup.

A total of US$20 million has been set aside for startups, while US$5 million is dedicated towards creating content for Razer’s open-source virtual reality (OSVR) ecosystem.

razer open-source virtual reality osvr
Razer OSVR / Image Credit: Flickr

To date, zVentures has funded five startups, all of which are listed on its website. It includes brands like Esports Mogul, a pure-play online esports platform, and Cash Shield, an autonomous fraud detection startup.

Razer-funded startups gain access to the firm’s massive business networks, 20-million-strong customer base, technology, distribution networks and more.

Razer Gold and Silver

Razer Gold and Razer Silver are Razer’s unified virtual currency system.

Razer Gold allows you to purchase games and in-game content for up to 33,000 games, at over 3.4 million channel touchpoints worldwide. This includes games like Mobile Legends and Call of Duty.

Pegged onto Razer Gold is Razer Silver, which is touted as the only loyalty rewards program for gamers.

Every spend on Razer Gold allows you to rack up Razer Silver, and eventually redeem rewards like Razer hardware, Steam games, vouchers and more.

razer gold and razer silver
Razer Gold and Razer Silver / Image Credit: Twitter

First launched in 2017, Razer Gold and Razer Silver and grew to be one of the world’s largest virtual currency and rewards platforms by 2018, serving more than five million users in a year.

Growth is surging, partially driven by the demand for at-home entertainment during Covid-19.

According to a report by Finextra, Razer Gold recorded a 125.9 per cent year-on-year increase in TPV for H1 2020.

Razer Fintech

Established in 2018, Razer Fintech manages one of the largest offline-to-online digital payment network in SEA, processing billions of dollars in TPV.

Razer’s fintech arm controls Razer Merchant Services and Razer Pay.

Razer Merchant Services powers online and offline payments for SEA blue-chip merchants like Grab, Lazada and Shopee.

Meanwhile, Razer Pay is an e-wallet targeted at youth, millennials and the underbanked. First launched in 2018 in Malaysia, the app allows you to top up, transfer, and pay for goods and services.

razer pay app
Razer Pay / Image Credit: Ringgit Plus

In January this year, Razer Fintech applied for a digital full bank license with the Monetary Authority of Singapore. The subsidiary has since been shortlisted and results will be announced in late 2020.

Users of digital full banks will eventually be able to conduct all their traditional banking activities entirely online. This includes withdrawing digital credits into real capital (which you can’t do with e-wallets like GrabPay — yet).

Razer Fintech also launched a digital hackathon in May to incubate digital banking solutions for problems brought about by Covid-19.

Like Razer Gold and Razer Silver, Razer Fintech has been experiencing a surge in growth. The financial subsidiary generated US$1.8 billion in TPV for H1 2020, representing an increase of 114.3 per cent year on year.

The growth was largely driven by new merchant onboarding and surges in online shopping and entertainment.

Razer Deepens Its Foray In Fintech

It has been over 15 years since Razer was first founded. That’s a relatively short time for a company to have virtually transformed the face of the gaming industry.

Now that Razer has its fingers in the fintech pie, it’ll be interesting to see how it goes up against fellow fintech players like Grab in SEA, who is already strong in the e-wallet game.

When it comes to the digital banking business, Razer has expressed that it is already assessing prospects to launch a digital banking business overseas as it awaits the outcome of its license application in Singapore.

Razer Fintech chief executive Lee Li Meng acknowledges that the local banking sector is highly competitive.

The firm is currently looking at Southeast Asia and other emerging markets such as India and Latin America as it seeks to expand its fintech business.

Featured Image Credit: fintechnews.my

Also Read: Gaming Firm Razer Unveils Record-High Revenue Of US$447.5M Amid COVID-19

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