Applabs Technologies (ASX:ALA) investee company xTV will expand into the lucrative China market after strategic equity partner Inno Valley announced it would drive growth of xTV channels into the world's largest growth market.
xTV is backed by Microsoft and health care giant UST Global, and is the Next Generation Media Network which delivers the platform to build users online TV.
xTV and strategic equity partner Inno Valley are set to drive xTV channels into the world's fastest growing market - China.
xTV has entered into discussions with Chinese incubator and accelerator, Inno Valley regarding their intentions to establish a joint venture to launch the xTV network directly into the Chinese market.
Inno Valley is one of China's best known incubators and accelerators with a key focus on the TMT and mobile Internet industry, and has invested US$500,000 to date into xTV as an equity partner.
Background on xTV
xTV was founded in 2011, with the company focussed on delivering to organisations the capability to lower their cost of content production.
Users can combine all of their streaming media into a branded, real-time and interactive TV network.
Highlighting the potential of the market, Cisco has predicted that by 2017, 70% of all internet traffic will be video content.
As announced on 20th June 2014 Applabs acquired up to 5.75% of xTV for US$400,000 in cash and stock. The company has been assisting xTV since its investment to explore a potential ASX listing and provide the company with the funding and exposure required to fully capitalise on the xTV platform.
xTV has also received a strategic investment into it of US$2 million by UST Global, a leading provider of end-to-end IT services and solutions for Global 1000 companies.
Intercept Minerals (IZM) announced an intention to acquire 100% of the issued capital of xTV for A$12,500,000. Applabs subscribed for 25,000,000 Intercept shares at $0.002 for a consideration of A$50,000.
The Intercept transaction offers an instant valuation accretion for Applabs' shareholding in xTV and the company intends to fully accept and support the offer.
The offer also provides greater liquidity for xTV shareholders by being listed on an exchange (NYSE:ASX).
Applabs seeds investment into companies in the rapidly expanding technology sector effectively de-risks its overall asset portfolio.
Today's news of xTV demonstrates that this company (and Applab's investment) could be on a rapid growth path, and by attracting companies of the calibre of Microsoft and UST Global, xTV has the potential to leverage this backing for further growth.
The growth curve of xTV highlights that Applabs is investing in companies "on the move" as well as detect undervalued private companies with differentiating features.
Just yesterday, another of Applabs portfolio investments, RosterElf's, revealed that its customer uptake soared by over 700% for the three-months ending October.
Applabs had $3.8 million in cash at the end of September 2014.
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