ARTICLES Gaming, Sustainability and Corona Accelerate a Positive Market Trend for Asetek

Gaming and eSports used to be something for young enthusiasts, involving snacks and cola

We meet up with Jimmy Fussing by Zoom from his home office that – like so many others – he has had to set up this winter as the world waits for the Corona vaccination programme to be completed and take effect.

Jimmy Fussing is Managing Partner of the venture fund Heartcore Capital, formerly Sunstone Technology Ventures, which administers Vækstfonden’s investment in Asetek A/S. The Danish government investment fund is one of Asetek’s major institutional investors. Heartcore Capital also puts capital from institutional investors such as pension funds into start-ups. Today, Heartcore Capital is involved in 55 tech start-ups across Europe, and is the country’s biggest venture fund.

These times, says Jimmy Fussing, are highly favourable to Asetek, on many significant parameters – even when it comes to Corona. “As unpleasant as the pandemic has been and still is all around in other ways, Corona has also helped to accelerate new consumer patterns that are making Asetek’s market position stronger and stronger – and that is hardly going to roll back when the pandemic is over,” says Jimmy Fussing. As an example, he mentions that the extent of the world’s online retail trade has more than doubled during the pandemic of the last 10-11 months – a trend that has seen the penetration rate grow more strongly in that short period than in the whole of the preceding 7 years. A much bigger e-commerce sector requires more and more cloud solutions.

Vækstfonden invested in Asetek all the way back in 2004, when it was a talented little start-up, and has since sold half of its shares, doing so immediately after the company went public in 2013. But they are still involved, with a stake of around 6% of Asetek at the time of print.

GAMING, SUSTAINABILITY AND CORONA ACCELERATE A POSITIVE MARKET TREND FOR ASETEK

MATURE COMPANY WITH GREAT POTENTIAL

“Gaming and eSports used to be something for young enthusiasts, involving snacks and cola. Now, anyone can see that many, many more people – including those from the parents’ generation – are getting into it. They follow their favourite team, they play along and start to worship the best players on a par with famous sporting idols in the physical world. The new heroes are eSport stars, and a whole generation of young people looks up to them. They are role models, and becoming like them requires investment in more powerful computers. It demands just the right technical equipment, and that’s where Asetek comes into the picture,” explains Jimmy Fussing. He points out that about 2 billion people follow eSport today, and there’s no reason to think the trend won’t continue.

“When we also consider another general social trend toward sustainability and energy saving, Asetek has just the right technology and product platform,” says Jimmy Fussing. He is also convinced that, for the first time in many years, we are going to see a period of real growth in demand for electricity, something he believes is highly favourable for Asetek’s other line of business, on-processor liquid cooling for data centers, which – among other things – makes it possible to reuse up to 80% of inbound power.

“In our view, André Eriksen, the founder and CEO of Asetek, is a gifted, determined and visionary entrepreneur who, together with the rest of the team, has succeeded in growing and maturing Asetek into a major, established, internationally-focused company,” says Jimmy Fussing. “We believe the company has a potential that is about to be fulfilled in earnest, so that in theory it could evolve into a new Danfoss,” referring to the world-famous Danish energy technology manufacturer, where Asetek’s founder first learned the ropes as a newly trained engineer and toolmaker, before he founded Asetek on the idea that computers and processors should be water-cooled. “A few years ago, we saw the company’s share price rising steeply, but at that time it was perhaps mainly due to a fever of expectation. Today, we can sense – in the latest accounts, for example – that Asetek is meeting those expectations. Both of Asetek’s existing business areas – gaming and solutions for data centers – are moving in the right direction,” adds Jimmy Fussing. “At the same time, these are truly sustainable products that can make a significant difference to society.”

Jimmy Fussing is Managing Partner of the venture fund Heartcore Capital, formerly Sunstone Technology Ventures, which administers Vækstfonden’s investment in Asetek A/S. Jimmy Fussing believes the times are highly favourable to Asetek on the great majority of significant parameters - even when it comes to Corona.