Secretlab could be Singapore’s next billion-dollar company

While many startups were hit hard during the Covid-19 pandemic, Singapore-based gaming chair maker Secretlab was able to cushion the blow.

More than that, it’s thriving. The company’s operating profit is set to jump by nearly 4x to an estimated S$70 million (US$52 million) in the financial year ending February 2021, according to a source familiar with the matter.

While Secretlab’s financials for FYE 2021 are still being audited, the company tells Tech in Asia that it is set to exceed S$350 million (US$260 million) in revenue for that period.

(From left) Secretlab co-founders Alaric Choo and Ian Ang / Source: Secretlab

These numbers put Secretlab within striking distance of surpassing US$1 billion in valuation, our analysis shows.

The company says that while it’s not actively looking for investors at the moment, it will keep its doors open if a suitable partner comes along. The firm added that it is seeing an upsurge in interest from investors and even appointed an external advisor to manage these discussions.

According to the gaming chair company, its EBITDA margin (pending the audit) has grown as a result of economies of scale from production and research and development efforts. Its manufacturing costs also remained relatively flat, while its revenue increased. This growth in revenue and its stable production costs were seen in its 2018 and 2019 results too, the company added.

As per Secretlab’s FYE 2020 financial statement – which was revealed for the first time on Singapore’s Accounting and Corporate Regulatory Authority (ACRA) – the company earned a net profit of S$16.4 million (US$12.2 million) for the financial year ending in February 2020, a nearly 2x jump from the previous period.

The startup posted an operating profit of US$33.5 million in FYE 2020, double of the US$18.7 million it reported in the same time span the year prior. It has also been cash flow-positive in those two periods.

Secretlab, which is backed by Temasek-owned Heliconia Capital, has seen a large increase in the sale of its gaming chairs. The company’s revenue from the sale of goods – which accounted for 99% of the firm’s total revenue – had nearly doubled in FYE 2020.

Covid-19 contributed to soaring revenue growth

In the notes that Secretlab released following its most recent financial statement, the company mentioned that it had seen an increased demand for its products as more people were working from home due to the pandemic.

It added that its sales were mainly derived from online channels and that it saw minimal disruption to its operations during Singapore’s Circuit Breaker period.

On track to become a unicorn

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