XM Studios, a producer of art collectibles, has raised $4.5 million in fresh capital through a tokenised offering on digital securities investment platform ADDX– formerly known as iSTOX. 

Temasek subsidiary Heliconia Capital anchored the funding round with an investment of $1 million. The deal comes after Heliconia was announced as a new strategic investor in XM Studios last week.

See: Temasek unit becomes new strategic investor in XM Studios

Founded in 2012, Singapore-based XM Studios produces hand-crafted figurines and collectibles. It currently holds intellectual property licenses for Marvel, Star Wars, DC Comics, and Sanrio. In 2020, the company recorded revenue of $16.9 million, more than double the $7.9 million recorded the year before, while net profit came in at over $4.2 million.

Its collectibles have prices ranging from under $1,000 to as much as $6,000 each. XM Studios makes the collectibles in collaboration with a team of international sculptors, illustrators and designers, and distributes them via a global network of 20 key distributors.

XM Studios' entire offering was tokenised on ADDX and 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 minimum investment size for the offering was $10,000.

The offering was 1.75 times oversubscribed, with other investors participating on the same terms as Heliconia. To accommodate high demand from investors during the subscription phase, the size of the deal was increased from $3 million to $4.5 million. 

Primary subscriptions have closed, and XM Studios tokens are now listed on the ADDX secondary exchange, where they can be traded by all accredited investors, including those who did not subscribe in the first instance.

The raised capital will be used for the expansion of XM Studios’ premium and premium mass collectibles business in new markets and the acquisition of new intellectual property licenses, as well as for general working capital purposes.

The listing of exchangeable notes of XM Studios marks the first in a new line of equity-linked products by ADDX, expanding the suite of ADDX listings beyond funds and bonds. In line with its strategy of building a multi-asset platform to meet all private market needs of investors, ADDX plans to roll out other new product lines this year, including structured products and investments with exposure to cryptocurrencies.

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

“The new capital also enables XM Studios to seize opportunities in the next phase of our expansion – in new markets and new segments like premium mass collectibles, allowing fans to buy their favourite collectibles at a more affordable price range,” Ang adds.

For Oi Yee Choo, chief commercial officer of ADDX, XM Studios is an attractive investment proposition. She notes that the company has succeeded in turning profitable even as it grows rapidly.

“Over the past decade, XM Studios has built a loyal, cult-like following among comic fans through its well-made products and high-quality portfolio of licensing agreements. They started with Marvel in 2013, but did not rest on their laurels, announcing in this year alone licenses with the likes of Sanrio, Harry Potter, Looney Tunes, and The Great Gatsby, as they expand into the premium mass collectibles segment. Investors stand to benefit by exchanging into shares at an attractive discount to valuation under specific liquidity scenarios,” she says.

Photo: ADDX