Viyi Algorithms Inc. Merged with Venus, Expected to Complete the SPAC Listing in the Third Quarter

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Viyi Algorithms Inc. Merged with Venus, Expected to Complete the SPAC Listing in the Third Quarter

August 21
04:26 2021

Hong Kong – Recently, TickerWin, the leading market research firm, has released a research report “Viyi Algorithms Inc. Merged with Venus, Expected to Complete the SPAC Listing in the Third Quarter”. Recently, Venus Acquisition Corporation (“Venus”), a publicly traded special purpose acquisition company, and VIYI Algorithm Inc. (“VIYI Algo”), a Cayman Islands exempted company operating in China has announced that they have entered into a definitive merger agreement. A newly created merger subsidiary of Venus will be merged with and into VIYI Algo with VIYI Algo being the surviving entity and becoming a wholly owned subsidiary of Venus. Upon closing of the transaction, Venus will change its name to MicroAlgo Inc.

The merger is structured as a stock for stock transaction and is intended to qualify as a tax-free reorganization. The terms of the merger provide for a valuation of VIYI Algo and its subsidiaries and businesses of US $400,000,000.

What is SPAC listing?

Special Purpose Acquisition Company (SPAC), as a listed platform (shell company), SPAC only has cash and no substantial business activities. The purpose of listing is to raise money, then find the target company to invest in, and turn the target company into a listed company through mergers and acquisitions.

SPAC is the third listing method different from the traditional “IPO listing” and “backdoor listing”. Its innovation lies in that it is not a backdoor listing, but the first shell, raising funds, and then mergers and acquisitions, and finally make the mergers and acquisitions to become listed companies.

Listing through traditional IPO means, it is necessary to complete the process of selecting intermediaries, submitting materials to the CSRC and the exchange, road show pricing and so on. However, through SPAC listing, the target enterprise only needs to merge with the listed entity to complete the listing.

SPAC has the characteristics of listing guarantee, short time, low cost, and natural market value management. It solves the problems of uncertain listing time, uncertain financing, long listing time, high cost and high risk after listing in the traditional IPO model, so it is favored.

VIYI Algo is dedicated to the development and application of bespoke central processing algorithms. VIYI provides comprehensive solutions to customers by integrating central processing algorithms with software or hardware, or both, thereby helping them to increase the number of customers, improve end-user satisfaction, achieve direct cost savings, reduce power consumption, and achieve technical goals. The range of VIYI’s services includes algorithm optimization, accelerating computing power without the need for hardware upgrades, lightweight data processing, and data intelligence services. VIYI’s ability to efficiently deliver software and hardware optimization to customers through bespoke central processing algorithms serves as a driving force for VIYI’s long-term development.

Currently, VIYI Algo is focused on developing and delivering central processing algorithm solutions to customers engaged in internet advertisement and gaming, and intelligent chips.  Moreover, VIYI’s customer base is rapidly growing due to a general demand for more efficient data processing in various industries driven by the growing internet population and prevalence of AI. According to the CIC Report, revenue of central processing algorithm services derived from internet advertisement and online gaming alone grew from RMB 2.2 billion in 2016 to RMB 6.9 billion in 2020, representing a CAGR of 32.7%. This market is expected to maintain a rapid growth trend, expanding at a CAGR of 15% during the period from 2020 to 2025.

VIYI derives its revenue primarily from (i) central processing algorithms services for the internet advertisement and internet gaming industries and (ii) intelligent chips and services, including software development.

VIYI’s revenue from central processing algorithms for the year ended December 31, 2020 was RMB 307.8 million, which represents an increase of RMB 196.6 million, or 176.8%, from VIYI’s total revenues of RMB 111.2 million for the year ended December 31, 2019. VIYI’s gross profit for the year ended December 31, 2020 was RMB 125.2 million, representing an increase of RMB 61.1 million, or 95.3%, from RMB 64.1 million for the year ended December 31, 2019. VIYI’s net income for the year ended December 31, 2020 was RMB 91.5 million, representing an increase of RMB 48.1 million, or 110.7%, from RMB 43.4 million for the year ended December 31, 2019.

The central processing algorithm service is a service based on a series of algorithms including analytical algorithms, recommendation algorithms and acceleration algorithms, which can empower downstream industries with higher demand for data analysis and computing power optimization, and apply to internet advertising, internet game applications, finance, retail, logistics and other industries. In view of huge downstream demands, the overall market of central processing algorithm services is huge. Major players in the central processing algorithm service industry include digital marketing service providers, online game service providers and algorithm solution service providers.

With the rapid development of the computer industry and the internet industry and the increase of internet penetration rate in China, the number of internet users and internet data in China have increased significantly. The internet industry is the largest application industry for central processing algorithm services, and internet applications’ demand for computing power are increasing.

In the mid-to-long term, VIYI will continue to adhere to its strategic mindset. By improving upon each iteration of VIYI’s one-stop intelligent data management solutions made possible by its proprietary central processing algorithm services, VIYI can help customers to enhance their service efficiency and make model innovations in business, and actively enhance the industry value of the central processing algorithm services in the general field of data intelligent processing industry.

The boards of directors of Venus and VIYI Algo have approved the proposed merger, which is expected to close by the end of the third quarter of 2021, subject, among other things, to the approval of Venus shareholders of the merger, the proposed change of name, the increase in Venus authorized share capital and the satisfaction of other conditions set forth in the Definitive Agreement and other customary closing conditions, This includes the completion of the review of the registration/proxy statement by the Securities and Exchange Commission (“SEC”) and nasdaq’s approval of the listing application.

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