GCL takes its game to Nasdaq – can it win over US investors?

Singapore-headquartered GCL Group’s recent IPO on the Nasdaq exchange marks yet another Southeast Asian firm seeking funding from US investors to fuel its growth.

The listing, which happened on February 14 through a SPAC merger, valued GCL at US$1.2 billion, and it raised US$43 million from the deal. 

Unfortunately, the gaming firm’s life as a public company has not had a propitious start. Its shares closed at US$3.05 on its first day of trading, down by 70% from the standard US$10 offer price for US SPACs.

Photo credit: GCL

However, Sebastian Toke, group CEO of GCL, remains confident that going public in the US is the right choice for his company, which has global operations.

Long-term success will hinge on GCL’s ability not just to distribute but also to develop hit games, but this may make it a more risky bet for investors. 

Not your typical SEA IPO 

Few Southeast Asian tech companies have pulled off successful US listings. Sure, Sea’s shares are up 9x from its US$15 offer price, but both PropertyGuru and TDCX delisted only a few years after they went public, at levels below their IPO price. 

Meanwhile, smaller players like real estate portal Ohmyhome and ride-hailing platform Ryde are languishing, with market capitalizations of under US$10 million. 

See also: Is PropertyGuru’s delisting good for SEA’s tech scene?

But GCL is different. For one, its core business operations are in game distribution and publishing – something the region isn’t widely known for, with the exception of Sea, whose gaming arm Garena is one of its core businesses.

GCL started out as game distributor Epicsoft Asia in 2007. It has since expanded into publishing through a separate subsidiary, 4Divinity.

Distributors handle the logistics of getting video games to retailers and online platforms, while publishers take a more active role by funding, marketing, and sometimes even shaping a game’s development.

In addition to Epicsoft Asia and 4Divinity, GCL’s subsidiaries include 2Game, a digital retailer of video games, and Titan Digital Media, the influencer marketing company founded by YouTube personality JianHao Tan. The group also operates gaming chair brand Martiangear and jewelry company The Starry Co. 

Recently, 4Divinity secured the publishing rights for blockbuster game Stalker 2: Heart of Chornobyl in Southeast Asia and China. It is also co-publishing Black Myth: Wukong, handling the global physical sales of the Chinese mega-hit title.

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