A day in the life of a super rich tech founder: buying good class bungalows (GCB) will be like going to the gas station to refuel …
If you haven’t read the news yet, at least three tech founders have reportedly bought or purchased GCBs in the past two weeks.
The tech’s first founder is Ian Ang, 28, CEO of gaming chair maker Secretlab. He allegedly snatched not one, but two freehold luxury properties for a whopping S $ 51 million. No, you didn’t hear it wrong, the young Singaporean boss has sealed the deal to join the ultra high networth club.
According to research firm Knight Frank, the very wealthy are those with a net worth of at least US $ 30 million in liquid assets, including their primary residence.
Two other tech founders or their families – Grab CEO Anthony Tan and Razer CEO Tan Min-liang – have reportedly bought or are considering buying GCBs worth between S $ 40 million and S $ 53 million.
GCBs are the crème de la crème of properties in the Singapore real estate market. To be considered a GCB, the unloaded accommodation must have a minimum land area of 15,070 square feet. In addition, only a citizen of Singapore can own a GCB.
Welcome to the club of the very wealthy
Globally, among the top 10 countries with the fastest growing Wealthy Individuals (UHNWI) population, Singapore ranks third, behind China and Sweden.
In fact, according to data firm Statista, the number of UHNWIs in Singapore is expected to increase by 30% from 2020 and reach 4,888 people in 2025.
These founders deserved their sustenance to be where they are. But it should be noted how the pandemic has resulted in increased consumer demand for technology.
Research firm Randstad said that the rapid adoption and advancements in technology have accelerated the growth of the information technology industry, especially in segments such as payments, advanced technology, gaming and electronic commerce.
This is proving to be true, as bosses have reported positive numbers for their tech companies in recent months.
We take a look at how these founders increased their wealth – according to publicly available information – and dig deeper to find out if they are overspending as well.
Ian Ang – CEO of Secretlab
Online research showed Ian’s net worth was linked to his business, which was worth S $ 300 million six months ago. The company’s operating profit increased nearly four times to an estimated $ 52 million in the fiscal year ended February 2021.
EdgeProp said in June that Ian was “well seated” on a company valued at S $ 2 billion.
Public records show Ian owns a 70 percent stake in Secretlab, while his co-founder Alaric Choo owns 25 percent.
In August 2019, Temasek’s subsidiary Heliconia Capital Management took a minority stake in the company, which was then valued between S $ 200 million and S $ 300 million.
If the records and reports are correct, that places Ian “gloriously sitting” on a S $ 1.4 billion stake in Secretlab.
This means that the co-founder is spending 3.64 percent of its shares for its S $ 51 million properties.
Tan Min-liang – CEO of Razer
Last August, Forbes listed Min-liang as having a net worth of US $ 650 million.
For the fiscal year ended 2020, Razer achieved profitability for the first time since 2014, with revenue of $ 1.2 billion. This is an increase of 48% from a year ago.
He also made a small profit. Min-liang had said further growth is expected in 2021, as more people get into the habit of gambling amid the pandemic.
Razer has a market capitalization of HK $ 17.82 billion on the stock exchange, which translates to S $ 3.10 billion. According to reports, the CEO earns US $ 10 million annually.
Judging from Razer’s 2017 IPO to date, that’s roughly $ 45 million in revenue as the CEO of the company.
According to a 2017 article, Min-liang owns around 33% of Razer. If that remains unchanged, that means the CEO owns a S $ 1 billion stake in the company.
Adding the increase in sales over the past year and Min-liang’s stake in the company – barring any undisclosed data – the Razer CEO has around S $ 1.06 billion in stock and cash. combined.
Spending $ 52.8 million on a GCB from this reserve, means it will use 4.98 percent of his net worth.
Anthony Tan – CEO of Grab
Although news reported that Anthony’s wife bought the house. For comparison, we’ll take a look at Anthony’s net worth and stake in Grab.
Grab is expected to go public in the fourth quarter of 2021. The deal is expected to be valued at US $ 40 billion, up from US $ 16 billion earlier this year.
With the deal, Anthony, who will own a 2.2% stake in Grab, could see his fortune climb to $ 829 million (S $ 1.12 billion). If the shares are trading above the deal price, it will lead Anthony down the billionaire path.
In 2019, Anthony was listed on Forbes with a net worth of US $ 380 million.
Grab’s revenue reached $ 12.5 billion in 2020, more than double the 2018 figures. It has jumped 70 percent from a year ago.
Adding to Anthony’s net worth in 2019 to match 2020, this brings his net worth to US $ 646 million or S $ 873.50 million in 2020.
If we calculate the S $ 40million GCB purchased based on his current net worth, Anthony would have to spend 4.58 percent of the total sum.
So are they spending too much?
Now that we’ve broken down the numbers we have, it seems to show that founders don’t spend more than 5% of their net worth on properties.
With Ian sitting on the biggest pile of money due to his reported 70 percent stake in Secretlab, it looks like he’s spending the least.
As for Anthony and Min-liang, it would likely be a tie on who spent the most, as both are neck and neck with growing their own businesses and Anthony’s SPAC is expected to launch at the end of the year. year and is not yet complete.
Maybe their seemingly “lavish spending” doesn’t seem so big after all, when compared to the average person who takes on massive debt to fund million dollar real estate dreams.
Real estate advisers have suggested that the standard rule of thumb is to have 20 to 30 percent of equity allocated to homes. This allows the person to capitalize the benefits of real estate ownership while pursuing other avenues of investment.
I guess this means that the founders of the tech should be looking for more GCBs in the times to come.
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Featured Image Credit: The Peak, Tatler
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