Malaysian games studio raises $3.4m after IPO in Australia

The land down under is a hot destination for Southeast Asian startups hoping to raise capital, weak economy be damned.

Malaysian-headquartered mobile games studio iCandy did just that, and it raised US$3.4 million, surpassing its target of US$1.76 million, it announced.

The company expects to list on the Australian Securities Exchange (ASX) in two weeks, after having met all “major requirements.” It will trade under the symbol ICI.

iCandy develops free-to-play smartphone games. It makes money through in-game advertisements, merchandise, and in-game purchasing of virtual goods used by players to speed up their progress.

Not quite crushing it yet

The group’s games have achieved over 13 million downloads in total. Does that translate to a profit? According to the company’s prospectus, it made only US$26,700 in revenue in the first five months of 2015.

It registered US$129,000 in financial year 2014, substantially down from US$208,000 the year before. In financial year 2012, it made US$21,100.

If we take into account earnings before interest and taxes (EBIT) however, iCandy lost money – US$113,000 to be exact – during the first five months of 2015. The loss is attributed to administrative expenses, which the company defines as compliance and salary costs.

The fundraising puts iCandy’s IPO price at US$32 million, which is considerably high for a firm with this income statement. Investors must be hoping for a vast improvement in performance going forward.

iCandy revealed its roadmap in the prospectus, which includes updating and localizing old games, acquiring games studios, and publishing new titles.

After the public offering, iCandy is expected to be 85.8 percent owned by FatFish Internet, an internet investment firm that’s also listed in Australia, though its stock price hasn’t done well lately. FatFish announced (PDF link) it’s trying to get its hiring software firm listed on the ASX.

And just yesterday, Singapore-based data backup company DropMySite revealed that it has started the process of listing on the same exchange.

Converted from Australian dollars. Rate: US$1 = A$1.42.