[Funding] Maxst Raises Capital Again Six Months After Listing... Accelerating Commercialization Timeline

Raised 15 Billion KRW via IPO in July Last Year... Funding Plan Reflected Until Next Year
Capital Increase Resolved in 6 Months... Accelerating Metaverse Commercialization
Concerns Over Plan Disruption Due to Recent Stock Market Decline

Jae-Wan Park, CEO of Maxst

[Asia Economy Reporter Hyungsoo Park] Maxst has launched a paid-in capital increase just six months after listing on the KOSDAQ market. The funds raised will be used for the metaverse portal and virtual space trading business, as well as mergers and acquisitions (M&A) of game and content companies. As the metaverse market rapidly grows, Maxst plans to commercialize its business based on its existing technologies. However, due to increased volatility in major stock markets worldwide, including South Korea, the scale of fundraising may be smaller than initially planned.

According to the Financial Supervisory Service’s electronic disclosure system on the 25th, Maxst will raise 52.7 billion KRW through a rights offering allocating 0.121 new shares per one existing share, followed by a general public offering of unsubscribed shares. The planned issue price for the new shares is 47,400 KRW, with the final price to be confirmed on March 31.

Founded in 2010, Maxst operates businesses including augmented reality (AR) development platforms, industrial AR solutions, and extended reality (XR) metaverse platforms. It entered the KOSDAQ market through a technology special listing in July last year. At that time, the public offering price was 15,000 KRW, raising a total of 15 billion KRW. The funds were planned to be used for research and development and overseas market expansion costs through next year. When setting the public offering price at the time of listing, Maxst fixed it at 15,000 KRW, exceeding the initially proposed range of 11,500 to 13,000 KRW. The additional funds raised from the higher issue price were allocated to existing employee salaries.

The stock price, which surged from the first day of listing, reached an intraday high of 99,500 KRW on November 17 last year. Since then, profit-taking selling and reduced interest in metaverse-related stocks caused the price to fall to around 50,000 KRW. Recently, as major countries including the U.S. have begun liquidity tightening, most metaverse-related stocks that experienced steep rises last year are undergoing price corrections. Considering the current market situation, the downward trend may continue until the new share issue price is finalized. If the issue price is lowered, the fundraising amount could decrease. Maxst’s stock price is currently 50,100 KRW, about 5.7% higher than the planned issue price of 47,400 KRW. If the price attractiveness for new shares declines, it may extend to the general public offering. If the general public offering is undersubscribed, Hana Financial Investment will purchase the remaining shares but must pay a 7% commission.

Maxst’s largest shareholder, CEO Jaewan Park, holds 21.05% of the company’s shares. Park plans to participate in the capital increase for about 15% of the 217,727 new shares allocated to him. The remaining subscription rights will be sold through over-the-counter transactions to strategic investors (SI) and financial investors (FI). After the capital increase, his shareholding ratio will decrease to 18.97%.

This year, Maxst has accelerated the commercialization of metaverse-related businesses to secure market leadership. This decision appears to consider the intensifying competition as global conglomerates enter the metaverse market one after another. Judging that the capital requirements will exceed the initial IPO plan, the company decided to proceed with the capital increase.

Maxst plans to use the funds raised through the capital increase for new product development and acquisition of securities of other companies. First, based on XR spatial construction technology and experience secured through R&D after the IPO, it will build a metaverse portal. It will provide service tools that enable companies wishing to build metaverse spaces to quickly and easily implement metaverse worlds connected to the real world.

It will also promote businesses that develop and trade virtual spaces. Using XR metaverse technology, Maxst will build spatial maps of major global hubs and distribute spatial map creation tools for other regions to support map production. Maxst explained that it decided on a large-scale paid-in capital increase beyond IPO fundraising to secure leadership in metaverse trends.

Maxst views early metaverse game content as the strongest incentive to attract users. It plans to invest 27 billion KRW in mergers and acquisitions (M&A) of companies in the game and content sectors. Due diligence is underway with preferred negotiation partners. However, due to the many variables inherent in M&A, if a suitable acquisition target is not found, the funds will be used for personnel recruitment and marketing expenses.