Collectibles-maker XM Studios raises S$4.5m in tokenised offering anchored by Heliconia
XM STUDIOS, a Singapore-based maker of luxury pop culture collectibles, has raised S$4.5 million through an offering of tokens on investment platform ADDX, formerly known as iSTOX.
The deal was anchored by Temasek unit Heliconia Capital and is the first equity-linked investment offered on ADDX. All other offerings have so far been tokenisations of funds and bonds, including the Astrea VI bond and a private real estate investment trust from Mapletree Investments.
Tokenisation refers to the use of blockchain technology to create fractional digital shares of assets. These tokens can then be traded on a secondary market.
The process also increases access to investments by lowering the investment threshold. The minimum investment size for XM Studios was S$10,000, down from the S$1 million minimum size typical for such investments, said ADDX and XM Studios in a joint statement.
XM Studios' offering was 1.75 times oversubscribed based on the company's fundraising target. The deal size was increased from S$3 million to S$4.5 million.
Heliconia anchored the deal with a S$1 million investment, and other international accredited investors took part on the same terms.
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Heliconia had earlier picked up a 9.2 per cent equity stake in XM Studios through secondary transactions of shares, The Business Times (BT) reported last week.
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The tokenised offering on ADDX - separate from Heliconia's earlier transaction - took the form of exchangeable notes that are redeemable for shares in XM Studios, at a significant discount under specific liquidity scenarios.
If the notes are not redeemed within 18 months, they will mature at an interest rate of 6 per cent per annum.
XM Studios co-founder Ben Ang told BT that the company is considering an initial public offering (IPO). "Timing-wise, we are still deliberating. The Singapore Exchange (SGX) is one of our potential choices," he said.
XM Studios grew from a humble hobby shop in Bras Basah Complex run by the Ang brothers in 1997 to a global brand with distribution in 18 markets today. Its current form was formally incorporated in 2012.
The company holds over 12 licences that allow it to make collectible statues from brands such as Marvel, DC, Star Wars, Transformers and Sanrio. Depending on complexity and size, the products' prices range from under S$1,000 to S$6,000 each.
Last year, revenue more than doubled to S$16.9 million from S$7.9 million in 2019. Profit after tax was S$4.2 million; the 2019 figure was undisclosed.
"The new capital 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," said Mr Ang.
ADDX's chief commercial officer Choo Oi Yee said ADDX is in discussions with a number of Singapore companies on equity offerings through tokenisation.
"A public listing comes with many responsibilities, and fast-growing companies may sometimes prefer to wait one or two more years before doing an IPO. In the meantime, a private listing on ADDX allows them to raise capital for their current expansion plans from a large base of accredited investors and funds," she told BT.
SGX and Heliconia are investors in ADDX. SGX's investments in private market platforms have been regarded as a way for the bourse to attract listings from promising companies by offering a pathway to the public markets. SGX has also backed CapBridge, which runs private securities exchange 1exchange.
Besides more equity-linked products, ADDX plans to roll out other new investment offerings this year, including structured products and investments with exposure to cryptocurrencies.
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