Fatfish Internet Group (ASX: FFG) will divest its 17% stake in online fashion and lifestyle retailer iFashion Group for A$4.23 million after an agreement was entered with Singapore-based fintech start-up MC Payment.
The sale is worth A$24.8 million in total, with MC Payment issuing Fatfish and iFashion’s other vendors a mixture of cash and shares.
News of the sell-off sparked Fatfish’s share price to rocket 25% during afternoon trade where it peaked at A$0.055.
Fatfish’s consumer internet division established the online retail entity in 2015 and it has since expanded to own, sell and promote some of Singapore’s “most successful new age lifestyle brands” such as Dressabelle, Megafish, Invade and Artbox Singapore.
“In three short years, iFashion was built and has almost doubled its revenue yearly, by acquiring and incubating multiple brands via a seamless and almost flawless process,” said Fatfish chief executive officer Kin Wai Lau, who is also a director of iFashion.
Under the sale agreement, Fatfish’s net A$4.23 million payment will comprise MC Payment shares.
“This sale of the iFashion business is highly significant for Fatfish as the sale marks a huge success in venture building,” Mr Wai Lau said.
The transaction is conditional upon MC Payment’s due diligence and is expected to be completed within six months.
Fatfish invests in Epsilon Capital
It’s been a busy week for Fatfish, with today’s news following the company’s announcement yesterday that it planned to spin out UK-based blockchain and cryptocurrency investment fund manager Epsilon Capital Management.
After the proposed spin out, Epsilon Capital will independently manage investments for the blockchain and cryptocurrency sector.
Fatfish already has a 10% interest in Epsilon and through the proposed spin out, Fatfish will invest US$500,000 (A$660,000) in Epsilon which will boost its stake to 20%.
Epsilon’s strategy is to become one of the “first fund-of-funds in the world” to invest exclusively in the blockchain and cryptocurrency space via hedge funds and venture capitalists.
Heading up the spin out will be Fatfish’s director of crypto financial markets Philip Lord. Mr Lord will steer the entity with the assistance of Max Von Etzdorf, Jeremy Sparrow and Joachim Godet.
“Fatfish has been incubating this project for over six months, whilst we hand selected a top tier team from the finance, investment and capital market industries,” Mr Wai Lau said.
“The cofounding team combines decades of experience across the international blue-chip roles and through this expertise, we aim to bring retail investors a more secure way to gain returns from this ever-expanding industry,” Mr Wai Lau added.
By late afternoon trade, Fatfish’s share price was up more than 18% at A$0.052.