Maquia Capital Acquisition Corp. (MAQC) to Combine with Immersed in $150M Deal

Maquia (NASDAQ:MAQC) has entered into a definitive agreement to combine with technology firm Immersed, valued at $150 million.

Austin, Texas-based Immersed provides enterprise AR/VR tools via a headset aiming to improve individual worker productivity and group collaboration.

The combined company is expected to trade on the Nasdaq under the symbol “AIMR” once the deal is completed.

Transaction Overview

Maquia has about $11.8 million in its current trust after seeing 93.7% of shares redeemed in extension votes.

It has supplemented this with $1.95 million in convertible notes with participation from investors All Blue Capital, Intel (NYSE:INTC) CEO Pat Gelsinger, ex-NFL player Tim Tebow, Sovereign Capital and others.

The parties have not yet released their merger documents or an investor presentation, but Maquia’s profile page will be updated once more terms and details are made available.

Quick Takes: SPACs have been around most of the hot new technology sectors of the past few years, but the metaverse is an area that SPACs have yet to firmly embrace.

MultiMetaVerse (NASDAQ:MMV), which combined with Model Performance in January, is the sole de-SPAC of its type to get all the way to close. And, despite its name, the company is more of an animation studio than metaverse-focused technology firm.

In a similar vein, Movella (NASDAQ:MVLA) completed a combination with Pathfinder in February, but, although its motion-capture technology could have metaverse applications, they are not a major part of its business yet.

Infinite Assets likely would have been the first pure metaverse/NFT company to go public via a SPAC, but Aries I terminated that deal in December before liquidating. Newbury Street may instead take up the mantle as a SPAC metaverse pioneer should it reach close in the $1.8 billion deal it struck with Infinite Reality that same month.

Social Leverage I (NASDAQ:SLAC) may have found a more picks-and-shovels way into the metaverse with its $1.2 billion pending combination with W3BCLOUD, which runs data centers designed to support metaverse and blockchain applications.

That still gives Maquia the opportunity to shepherd the first target firmly within the metaverse to the public markets. However, in perhaps a sign of some leeriness around the term given Meta’s (NASDAQ:FB) high-profile misfires in the arena, the word “metaverse” appears nowhere in the parties’ announcement press release.

Immersed has created virtual workspaces that workers can join via a headset to meet with distant colleagues, or simply enhance their own personal desktop view. These meeting spaces in particular look very similar to Meta’s projects with each worker’s avatar represented by disembodied heads, torsos and hands.

But, Immersed describes this as “AI productivity solutions that use spatial computing to digitally transform the working environment”. For better or worse, “metaverse” is much shorter.

It offers this as an enterprise solution and a total of 730,000 unique users have plugged into its system at some point. In the last quarter, users logged 20 million minutes with Immersed and the company hit a peak of 87,000 monthly active users in May.

In AR rather than VR mode, the company’s Visor headset provides displays to enhance real-life activities similar to Apple’s (NASDAQ:AAPL) new Vision Pro headset. This has the potential to cut both ways for Immersed.

On one hand, there’s a clear market there, especially if Immersed is able to offer its headset at a lower price point than the $3,499 Vision Pro. But, a smaller company going head-to-head with Apple and other tech giants without a massive runway of cash to burn is obviously a tall ask.

Looking at marketing alone, Immersed debuted the Visor with a launch webinar on YouTube six days ago, and it has around 7,700 views. Apple’s YouTube video launching the Vision Pro two months ago has meanwhile been watched 54 million times.

One potential advantage from a pure product standpoint is that Immersed is not attempting to have its Visor device provide all of the computing power – it essentially is a display that connects to a laptop, which is doing much of the hardware work.

This makes it 25% lighter than most smart phones, and therefore potentially more comfortably wearable over a full workday – which is Immersed’s primary stated use case. This could also allow it to drop the price point competitively and even include devices in enterprise contracts with clients to speed up adoption.

That could similarly be a double-edged sword over the long term. The largest part of the wearables market is likely to continue to be consumer use and if people are getting their Immersed Visor as a piece of company-issued hardware like their work computers, it may be hard to compete for coolness with the Apples of the world.

Again, any rollout scenario is going to require some cash and this transaction as currently constituted is not dropping a war chest at Immersed’s feet.

The company has not released any financials, but it has only raised $14.3 million in outside funding to date since its 2017 founding, according to Pitchbook. And, nearly all of this came from early venture capital investors.

So, much more information will be needed for investors to assess whether it will be able to hit its goals. But, the deal’s combination of a B2B metaverse play with a headset that has the potential to compete with the incumbent tech giants is certainly compelling.

The market appears to agree with that much as Maquia is up about 6% to $11.93 in early morning trading – well above its $10.84 pro rata trust value.

ADVISORS

• Immersed Advisors:
  • Greenberg Traurig, LLP is serving as legal advisor
• Maquia Advisors:
  • EF Hutton is serving as capital markets advisor
  • The Law Offices of Allan M. Lerner and Homer Bonner Jacobs Ortiz are serving as legal advisors