Global digital media company migme announced that it has completed the raising of AUD$10.226 million (before costs) pursuant to the issue of 25,564,879 fully paid shares at an issue price of AUD$0.40 per share (of which 5,045,069 shares were issued to Meitu Investment Limited (Meitu) on 7 July 2016).
As part of the capital raise, migme received AUD$2 million from Meitu, AUD$4.5 million from strategic investors, including FIH Mobile Limited (Foxconn), PT Media Nusantara Citra Tbk (MNC) and Malcolm Steinberg (proprietor of the LAI Group) and a further AUD$3.7 million from sophisticated investors. In addition and subject to the receipt of shareholder approval, CEO of migme Steven Goh, has agreed to subscribe for 250,000 shares.
Following recent upgrades to the Company’s platform and subject to market conditions and business risks, the funds raised will be applied to generate further growth, user engagement and monetisation, which in turn is expected to deliver cash flow positive operations in 2017.
Steven Goh, CEO of migme said, “The strong support received from Meitu, Foxconn, MNC and Mr Steinberg illustrate that they are excited about the user numbers and revenues reported in our June 2016 quarterly report and we look forward to continued growth across our key markets in South and Southeast Asia.
In the June 2016 quarterly, the Company saw growth in Monthly Active Users (MAU) up 10.3% to 43 million and revenues increased 7% to AUD$7.6 million, whilst cash outflows fell 10% to AUD$5.1 million. The focus for the next quarter is on cost management whilst preserving headline growth.
Following the completion of the acquisitions of Hipwee, Shopdeca and Sold, cash flows will continue to decrease as the Company integrates these businesses and expands the platform, contributing to the growth of MAU and revenues and at the same time deepening user engagement.
In building a substantial and valuable user base, the Company’s alignment with strategic partnerships (including Meitu, Creative Artists Agency, Sony Music and Universal Music) accelerates our expansion in the region by working with artists and entertainers, games and apps. (migme’s first mobile game Gone Goose and Meitu’s BeautyPlus and MakeUpPlus) and other content providers.
The recent alliance with the MOX (Mobile-Only Accelerator) platform provides the Company with further reach to over 135 million2 Android handsets, access to regional apps and local market OEM’s (Original Equipment Manufacturers), in addition to their mobile preinstall and distribution partners (including MoMagic, Smartfren, Spice Global and Trikomsel) for their key markets.
Mr Goh said, “LINE’s recent IPO on the Tokyo and New York stock exchanges provides proof that our business strategy works in the region. I believe we have the right investors, management team and strategic partners to build a social entertainment business that’s right for our target markets.”
“We appreciate the support of our shareholders and stakeholders during this capital raising process. Our strong board and management team led by Non-Executive Chairman Andi Zain, along with recently appointed Chief Operating Officer Craig White and Chief Strategy Officer Yen Chang (Charles) Pan, sets the Company in good standing to deliver against our business strategy and the delivery of cash flow positive operations in 2017.”
migme anticipates that, following the release of this announcement, ASX will re-instate the Company’s securities to trading as of the commencement of trading on Monday 22 August 2016.