VC-backed MC Payment to list in Singapore via reverse merger

Artivision will pay S$80 million ($58.9 million) for all of MC’s issued and paid-up shares, along with its convertible bonds, which have an aggregate principal value of S$5.5 million. The company will also issue new shares to MC’s shareholders equal in value to their investments. The new shares will be priced at S$0.014 apiece, a discount to the closing price of S$0.017 on October 26, and will represent 60% of Artivision's share capital following the transaction, according to a filing.

Founded in 2005, MC provides electronic payment solutions in Southeast Asia and Oceania, supporting all stages of the value chain from suppliers and merchants to consumer payments. Its products include data processing solution Xaavan, transport payment platform MatchCab, and mobile payments application ffastpay.

The company’s backers include ESW Manage, which led a S$6 million Series B round last August with participation by DZW Capital and Golden Equator Capital. 2W Group, a family-owned private equity firm based in Singapore, led a further S$5 million funding round last November that was joined by Aura Funds Management, Tryb Capital and Perle Ventures.

"By reacting quickly to adapt to the market’s needs, we have positioned ourselves favorably as an enabler of holistic payment solutions to businesses in the region,” said MC founder and CEO Anthony Koh in a statement. “The proposed listing in Singapore is an excellent platform which will further raise our profile, enable us to better serve our customers and provide us access to the broader investor community, bringing us to our next phase of growth.”

Artivision was founded in 2004 as a developer of video security solutions such as facial recognition and motion capture for enterprise, government, and transportation applications. Following an IPO in 2008, it shifted to providing video advertising technologies and platforms for online businesses through its subsidiary Artimedia.

Artivision also established a contract manufacturing operation in Thailand in 2012 with an exclusive contract to make hard disk drive components for a US-based multinational. This business has struggled due to a slowdown in the global hard drive industry. Revenue dropped from S$7.7 million for the year ended March 2016 to S$7.2 million the following year. Last month Artivision said the contract would not be renewed when it expires next March.

While Artivision's overall revenue increased from S$11 million to S$22 million over the past year, its net loss grew from S$7.8 million to S$15.9 million. With both of its business lines now defunct the company sees the MC transaction as a way to rebuild its business and reorient itself toward Southeast Asia's rapidly growing cashless payment industry.

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