Taiwanese consumer electronics group HTC has agreed to invest €3 million in Waterford-based virtual reality company VR Education.
In a stock market update on Wednesday, the company said that it and HTC are entering into a “strategic partnership” for the distribution and licence of its flagship product, the Engage virtual reality platform.
VR Education will issue more than 48 million subscription shares at a price of 5.47p per share, a 10 per cent premium to the market price when discussions between the two companies began. Net proceeds of the deal will be €2.93 million. HTC will also be granted the right to appoint one non-executive director to the company’s board.
"The subscription will provide additional funding for the next stage of our development, and allow us to progress the capabilities and commercialisation of our core Engage platform at a time when industries across the globe are adapting to new and innovative ways of working," said David Whelan, chief executive of VR Education.
The company said it would use the proceeds of the subscription to further develop its Engage platform and built its sales and marketing capability.
VR Education also updated the market on current trading, noting that it has “continued to make progress during the first half of 2020”. Its virtual reality experiences, including Apollo 11, Titanic and Shuttle Commander, have generated €2.5 million in sales since their respective releases.
The company hosted a HTC conference on its platform in March which has also led to a “significant number of inquiries from blue-chip corporate customers who are interested in using Engage”, it said. Since that conference the company has signed deals with companies seeking to use the Engage platform.
Remote working
VR Education said the Covid-19 pandemic had provided a “significant market opportunity” for the group whereby its Engage platform could be used to facilitate the significant increase in demand for remote working, virtual conferencing and other collaboration tools.
Under the deal announced on Wednesday, HTC has agreed not to sell its shares except in limited circumstances for at least six months.
“Earlier this year we saw first-hand the kind of value we can deliver through Engage...With the ongoing global pandemic we recognise that now, more than ever, it is important to invest in and expand accessibility to XR technologies that enable human connection and maintain presence when we are all physically apart,” said Alvin Graylin, HTC’s China president.
The deal is subject to VR Education’s shareholders passing certain resolutions to be proposed at an extraordinary general meeting to be held on June 11th.
