The stock of 17LIVE fell to SG$3.80, representing a 2.06% decrease from its open at SG$4. This marks Singapore's maiden IPO following a merger with a SPAC. Last month, Deloitte commented that this could be the beginning of a larger trend of SPACs joining the local market.
On Friday, 17LIVE made Singaporean history as the first company to list its shares by merging with a Special-Purpose Acquisition Company (SPAC). The inaugural listing opened at SG$4 and closed at SG$3.80, representing a 2.06 percent drop. VTAC, the first local SPAC, went public in January of 2022 and is funded by Vertex Venture Holdings—a venture capital division of Singapore's state investment firm, Temasek Holdings. According to Deloitte, 17LIVE's merger with VTAC may pave the way for more SPAC listings in the region. Ng Jing Shen, co-founder of 17LIVE, told CNBC that the firm decided to use a SPAC merger to expedite the process of taking the company public. He said that using SPAC would save the company time and enable them to capitalize on growth opportunities they have in Southeast Asia.
Ng informed CNBC before 17LIVE's listing that they view themselves as a global livestreaming platform. He said Singapore is a great launchpad for them, given its status as a global financial hub. The livestreaming platform permits users to communicate with streamers and offer them virtual presents in real-time. According to the firm, out of 17LIVE's monthly active users, 16% shell out money, with the average monthly revenue for each paying user being $302. Ng said, "Our business model doesn't rely on advertisements. Our success isn't measured by views, rather by interactivity. This is why we generate revenue from gifts that our users buy from us." He did not disclose specific figures in this regard. The platform had approximately 87,000 contracted live streamers as of the end of June. Content creators are either brought on board by agencies or talent scouted, with the duration of the contracts being between one and seven years.
Ng explained that, once someone signs with them, they go through a training programme from their in-house talent management agency. This programme teaches them how to stream, use equipment and the app. Additionally, after commencement, they have access to specialised talent managers who supervise their videos and offer guidance.
17Live was founded in Taiwan in 2015 and expanded to Japan two years later. Now, the majority of their income (70%) comes from Japan, while the remainder is obtained from Taiwan and Southeast Asia. With its mobile app, customers can develop avatars and broadcast live streams.
The market size for virtual idols in Japan is forecast to ascend to $3.86 billion in 2027 from $630.7 million in 2022, as stated in a SPAC merger filing. In 2022, 17Live earned operating revenue of $363.7 million and registered losses of $51 million, the filing revealed.
In September 2021, the Singapore Exchange became the first major Asian bourse to permit SPAC listing with the intention of encouraging more firms to list in the Singapore, considering the lack of IPO activity. Minister Tharman Shanmugaratnam noted in 2020 that from 2009 to 2019 there were 302 delistings compared to the 279 companies that listed in Singapore. Chua Kee Lock, CEO of Vertex Holdings, pointed out to CNBC that this initiative can provide a more viable alternative for quick-growing companies that would otherwise list in Hong Kong or the US. In the wake of this, the Hong Kong Stock Exchange proposed measures in September to attract small- and medium-sized entities of high growth potential. Additionally, the Hong Kong government created a task force in August to enhance stock market liquidity and promote the development of the capital market.
Despite macroeconomic uncertainties driven by high inflation, increasing interest rates, and volatile markets, 17LIVE was listed. In contrast to the stock market activity of 2020 and 2021, many companies in 2022 have opted to wait and see rather than listing. Kroll's financial and risk advisory report revealed that SPAC IPO activity dropped by 76% in the initial half of 2023 in comparison to the previous year. Regarding 17LIVE's listing in a time of economic uncertainty, Chua commented, "I think the market will come back. You can't expect what is up to stay up forever and also what is down cannot remain down forever."
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