Taiwan streaming platform set for Singapore SPAC merger
17Live, a VC-backed Taiwan-based streaming platform that previously tried and failed to list in the US, is set to become the first company to list in Singapore through a merger with a special purpose acquisition company (SPAC).
It will complete a business combination with Vertex Technology Acquisition Corporation (VTAC), a SPAC established by Temasek Holdings-owned Vertex Venture Holdings, at an equity valuation of up to SGD 1.16bn (USD 844.6m), according to a filing. VTAC became the first SPAC to list in Singapore in late 2022 when it raised SGD 200m.
Parallels can be drawn with Hong Kong, which unveiled its SPAC guidelines in late 2021, just weeks after Singapore. Aquila Acquisition Corp. was the first SPAC to list and last month it became the first to agree to a merger. The target, valued at USD 1.27bn, is Zhaogang, a private equity-backed Chinese B2B steel-trading platform. Zhaogang had previously attempted to go public in Hong Kong on its own.
VTAC will execute the 17Live merger through the issuance of 160.6m new shares at SGD 5.00 apiece. A further 24.4m new shares will be issued as earnout shares, effectively rewarding investors who retain their positions through August 2024.
The equity valuation of SGD 1.16bn will be reached if no SPAC shareholders elect to redeem their shares for cash on completion of the deal. As an incentive not to redeem, 3.76m special bonus shares are being offered – to be funded by Vertex waiving its right to receive a portion of shares as the SPAC sponsor. Any redemptions will also be counterbalanced by a SGD 10m placement to PIPE investors.
A separate portion of shares will be allotted to investors in 17Live, including Vertex Growth, a growth-stage investor that counts Vertex Holdings as an anchor LP, Vertex Ventures Southeast Asia & India, and Infinity Venture Partners.
The Vertex entities led a USD 26.5m Series D round for 17Live – then known as M17 – in May 2020. This was the company’s third funding round since it scrapped plans for a USD 60.1m IPO in the US. The other two rounds saw Infinity, Convergence Ventures, Majuven, and Global Grand Capital contribute USD 35m and Stonebridge Ventures and Temasek-controlled Pavilion Capital put in USD 25m.
Vertex, Infinity, and Majuven first backed 17Live through a USD 40m Series A in 2017 alongside KTB Network China, Yahoo Japan, and Golden Summit Capital.
The company was established in 2015 through the merger of Taiwanese live-streaming broadcaster 17 Media and Paktor, a Singapore-based dating app considered a segment leader in Taiwan, Vietnam, and South Korea, as well as its home market.
17Live now claims to be the top pure-play live streaming platform by revenue in Japan and Taiwan, with market shares of 20.8% and 26.9% in 2022. The platform, which is accessible globally, connects users to live streamers who generate content through AI-powered personalised search and recommendation. Users can show their support for live streamers by sending virtual gifts that can be monetised.
In the first half of 2023, 17Live had approximately 550,000 monthly active users (MAUs), of which 16.1% also spent money on the platform. The average viewing time per day was 93 minutes. The company has contractual relationships with around 87,000 live streamers.
Revenue reached USD 363.7m in the 2022 financial year, down from USD 497.8m in 2021. Over the same period, EBITDA fell from USD 15.5m to USD 15m and the company swung from a net profit of USD 109.5m to a net loss of USD 51m, largely due to changes in the value of convertible shares.
“As a technology-driven live social entertainment platform, 17Live has made extensive investment to enhance its R&D capabilities and scalable technology stacks in order to effectively innovate its product offerings and ensure content and data security. We have over time refined our core capabilities whilst harnessing the vision of a live streaming ecosystem to better connect people anytime, anywhere,” Joseph Phua, chairman and co-founder of 17Live, said in a statement.
"VTAC, with their strong expertise in technology has today, validated this vision as we take another step towards solidifying 17Live's position as an innovative leader in the space. Listing on SGX-ST will allow 17Live to grow its businesses in Southeast Asia and globally.”
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