Mercia firm nDreams raises £20.1m from new investor

Mercia Asset Management announced a £20.1m third-party investment round into its largest direct investee by fair value on Tuesday, virtual reality (VR) games developer nDreams.

The AIM-traded firm said the investment was from Stockholm-based video game investor Aonic.

Following the investment round, Mercia now held a 33.2% fully-diluted direct investment stake in nDreams valued at £25.8m – an increase of £8.1m from its 30 September carrying value.

Mercia said that would have a consequential positive impact on both operating profit and net assets as at 31 March.

“This is an important development for nDreams and one that will enable it to further strengthen its position as a leading studio in the VR market,” said Mercia chief investment officer and nDreams director Julian Viggars.

“Aonic’s investment is also an indicator of the potential scale of VR technology and nDreams is well placed to capture the opportunities this presents.

“This material fair value increase is another example of the underlying value creation potential in our direct investment portfolio, which is now being recognised by co-investors and acquirers.”

Mercia described nDreams as a “leading developer and publisher” of virtual reality games including Phantom: Covert Ops, Fracked and Far Cry VR: Dive Into Insanity.

It said it had a “strong pipeline” of future projects already in development, including games for the PlayStation VR2.

nDreams also recently expanded its development capabilities by announcing two new studios, nDreams Studio Orbital and nDreams Studio Elevation.

In August last year, nDreams also appointed former Codemasters chief executive Frank Sagnier as its non-executive chairman.

“This investment is a pivotal moment for nDreams, and I’m delighted to now have the combined support of Mercia and Aonic, who share the same ambitious vision that we do,” said nDreams co-founder and chief executive officer Patrick O’Luanaigh.

“This investment is the rocket fuel needed to accelerate our rapid growth, as VR continues its trajectory towards becoming a truly mass-market technology.”

At 1205 BST, shares in Mercia Asset Management were up 7.08% at 33.73p.