Digital Domain Holdings, the Hong Kong-listed parent of special effect firm Digital Domain 3.0, has received financial backing from Japanese tech giant SoftBank, Chinese state investment group CITIC and a private investor.
The stakes add up to only 3% of the company, but Digital Domain described them as “strategic investors.” The Chinese private investor was named as Zheng Hao Investments.
The SoftBank investment was made through its China fund, SoftBank China Venture Capital.
Digital Domain will receive some $25.8 million (HK$200 million) through the exchange into shares of convertible notes held by existing shareholder Harmony Energy. The trio buy their shares at HK$0.55, compared with the HK$0.61 open market price at the close of trading last week.
The company said that the proceeds “are intended to be applied towards media entertainment segment and used for general working capital.” But from the investors statements it seems likely that it will be applied to further expansion of Digital Domain’s interests in virtual reality (VR) technology.
“We are happy to ink a partnership with Digital Domain to develop virtual reality and related technology via the share subscription. We recognize the potential of VR development globally, particularly in the Greater China market,” said Pu Jian, executive director of CITIC Limited.
Digital Domain Holdings completed the acquisition of Digital Domain 3.0’s stake from Prime Focus Limited in June 2016, giving DDH sole ownership of the visual effects house. DDHL and Prime Focus however plan to jointly provide post production and visual effects services to the advertising, animation and virtual reality industry.