UOB Venture-backed Chinese AR Firm WiMi Hologram Raises $26m In US IPO

WiMi Hologram Cloud Inc, a Chinese provider of ad services and software used in holographic augmented reality (AR), raised $26 million in its IPO in the US after pricing its American depositary shares (ADSs) at $5.50, the lower end of its target range.

The Beijing-based company has become the first firm to launch a successful IPO in the US since the World Health Organisation declared the COVID-19 pandemic, according to UOB Venture Management, one of its backers. The listing gives WiMi a market value of $325 million.

WiMi listed on the Nasdaq Stock Market on April 1 and closed at its IPO price of $5.50 on its trading debut. The price, however, dropped to $5.39 at the close of the trading day on Wednesday.

The Beijing-based company had previously filed to offer 4 million ADSs at a price range of $7.50 to $9.50, which would have seen it raise $34 million at the midpoint of the range. WiMi, however, lowered the price range to $5.50 to $7.50 but raised the ADSs offering to 5 million.

WiMi aims to use the bulk of the IPO proceeds for research and development purposes, including the development of holographic facial recognition systems, AI facial change, digital life system, holographic education intellectual properties, navigation system for cars, and more.

It also seeks to finance strategic acquisitions and investments using the IPO proceeds.

Founded in 2015, WiMi’s software allows users to insert real or animated three-dimensional objects into video footages to create an immersive and interactive holographic AR experience. The company claims to be the leader in China’s $500-million and growing holographic AR space.

For the 12 months ended June 30, 2019, WiMi Hologram booked $39 million in revenue, with 83.1 per cent of the total generated by its holographic AR advertising services.

In the first half of 2019, holographic AR ads produced using the company’s software generated a total of approximately 4.9 billion views, as compared to approximately 2.7 billion views during the same period in 2018, representing an increase of 81.5 per cent.

The company, however, acknowledges that the ongoing COVID-19 pandemic poses a substantial risk to its operations and financial condition.

“The global stock markets have experienced, and may continue to experience, a significant decline from the COVID-19 outbreak. It is possible that the price of our ADSs will decline significantly after the consummation of this offering, in which case you may lose your investment,” WiMi said in its amended SEC filing.