Mobile chat firm Mig33 is raising money and rebranding as MigMe. The move will allow the company to pivot as the Asian mobile phone market shifts from feature phones to Android devices.
The deal is complex, but it will clean up the ownership and allow the company to pivot into a new market and become a publicly traded company in Singapore, said Steven Goh, chief executive of Mig33, in an interview with VentureBeat.
Under the deal, FIH Mobile, a Hong Kong-based mobile phone maker will invest $2.2 million in Project Goth Inc., a Perth, Australia company that serves as the parent company for Mig33, which relocated to North American and then moved again to Singapore.
PGI will go public by allowing itself to be acquired by Latin Gold (which trades under the symbol ASX: LAT) on the Australian stock exchange. Latin Gold is a shell company created for the purpose of doing a reverse merger that takes another company public. After the transaction, PGI will receive another $7.4 million in investment through the placement of shares. As a result of the investment FIH Mobile will own up to 19.9 percent of the final company, which will go by the name MigMe. That suggests the total valuation of Mig33 will be about $46 million after the transactions are done.
Goh said the investment was a strategic move for the company and will help it pivot from the business of creating a social network and chat for feature phones to offering mobile chat for Android-based mobile devices in the Asian market.
Goh said MigMe will set up a business development center in Taiwan, where FIH is based. It will be able to target its services toward mobile device manufacturers, who make about 100 million phones a month in the Southern China region.
Latin Gold shareholders have to vote on issuing shares to FIH at a meeting scheduled in June. Under the transaction, Mig33’s U.S.-based venture partners will sell their stakes and exit the company, Goh said.
“This will simplify the ownership,” Goh said.
Goh acknowledged that the company has gone through a lot of changes, focusing on making entertainment, game, and chat services for feature phones in the Asian market. Now the company wants to offer Twitter-like messaging services akin to what Weibo offers in China. But MigMe will not target the Chinese market.
Mig33 was founded in 2007 and has 95 employees in Singapore, Malaysia, Indonesia, and Hong Kong. Mig33’s revenues are about $3 million, and it has 4 million monthly active users.