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Now backed by Temasek's Heliconia, XM Studios harbours unicorn dreams

Jovi Ho
Jovi Ho11/3/2021 10:00 PM GMT+08  • 5 min read
Now backed by Temasek's Heliconia, XM Studios harbours unicorn dreams
“XM Studios has grown from a humble shop in Singapore’s Bras Basah Complex into a global brand."
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Muscular and intimidating figurines of superheroes from DC and Marvel Comics may have put XM Studios on the map of collectors worldwide, but the the company’s new intellectual property licences exude a softer appeal.

Soon, the local producer of handcrafted and hand-painted luxury art collectibles will bring to life characters from Sanrio, The Great Gatsby, Looney Tunes, Harry Potter, Tom & Jerry and Scooby-Doo.

Make no mistake, however, as the business is no child’s play; big plans have been afoot since The Edge Singapore spoke to the company’s co-founder and CEO late last year.

See: Singapore's own 'Toy Story' rakes in big bucks with small figures

The Edge Singapore understands that XM Studios is pursuing an approximately $300 million valuation in its next fundraise, either via an IPO or a private round. That is not all, for the company aims to become a unicorn — valued at $1 billion — within three to five years.

While the pandemic has paralysed many sectors, it has not derailed growth for XM Studios. Instead, collectors spend more time at home admiring their collections, says co-founder and CEO Ben Ang.

“With more and more people turning to online shopping, we have also geared up our digital marketing efforts to help create awareness of our brand and products,” Ang tells The Edge Singapore.

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That has paid off handsomely, especially with a range of products priced from a few hundred dollars to as much as $6,000 each. From $7.6 million in sales reported in 2019, the company doubled its revenue to $16.9 million for 2020, while net profit reached $4.2 million.

With that, the company caught not just the attention of the media, but also that of investors. In September this year, XM Studios found a new strategic investor in Temasek subsidiary Heliconia Capital Management.

Heliconia Capital announced on Sept 2 that it had entered into an agreement to become a strategic investor of XM Holdco, which owns 100% of XM Studios.

Heliconia Capital says its investment experience in other direct-to-consumer and sports entertainment companies like Razer, One Championship, Cariuma and SecretLab will be valuable to the company.

See: Heliconia-backed XM Studios raises $4.5 mil through tokenised offering on ADDX

See also: Temasek unit becomes new strategic investor in XM Studios

Under the agreement, Heliconia Capital will support XM Studios to leverage digital technology and creativity for new product development, branding, marketing and channel distribution. The investment firm also plans to tap on Temasek’s extensive global network to support XM Studios.

“For years, the affluent consumers in Europe, America, China and India have been spending huge amounts on luxury items like fine art, antiques, jewellery, watches, wine, cars and others,” says Derek Lau, CEO of Heliconia Capital.

“In the new digital age and pop culture world, a new product segment has emerged. Wallet size has expanded and shifted to this new category quite significantly over the years.”

According to Ang, the partnership has been years in the making, and the two companies have “always had good chemistry”.

“In the past year, we both recognised that the pop culture ecosystem and digitalisation have shifted in our favour, and there is now a lot that XM can quickly do in the region and globally,” says Ang. “It is therefore timely to take our relationship to the next level with Heliconia as our value-adding strategic investor to help XM to become the next unicorn. We are very excited.”

Just one week after that announcement, XM Studios made headlines yet again. The company announced on Sept 9 that it had raised $4.5 million in fresh capital through a tokenised offering on digital securities investment platform ADDX, formerly known as iSTOX.

Heliconia Capital anchored the funding round with an investment of $1 million, and the offering was 1.75 times oversubscribed with a relatively accessible minimum investment of $10,000. To accommodate high demand from investors, XM Studios increased the size of the deal by 50% from an original $3 million.

The tokenised offering comprises exchangeable notes that are redeemable for shares in XM Studios at a discount under specific liquidity scenarios. If the exchangeable notes are not redeemed within 18 months, the notes will mature at an interest rate of 6% per annum.

“The fundraising on ADDX was designed to allow fractional access at a minimum investment of just $10,000, because we wanted to provide long-time XM Studios fans with the chance to take part in the growth of the company,” says Ang.

With the fresh capital raised, XM Studios wants to build on its existing business and tap on new markets like the Middle East and India.

As other countries learn to live with Covid-19, XM Studios has begun meeting fans and collectors once again. In early October, the company participated in the New York Comic Con 2021, where it unveiled its first line of Godzilla statue collectibles.

At home, the company is set to open its XM Flagship Store at the end of the year. It will occupy 19,000 sq ft of space at Kitchener Complex, housing its retail space, a gallery, a cafe and the company’s office.

The store also presents an opportunity for XM Studios to retail new offerings, as the company diversifies into mass premium collectibles and lifestyle products, which are more accessible than its famed statuettes.

“XM Studios has grown from a humble shop in Singapore’s Bras Basah Complex into a global brand,” says Ang. “We could not have done this without the consistent support of our fans and collectors over the past decade.”

Photos: Albert Chua / The Edge Singapore, XM Studios

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