Mercia Asset Regulatory News (MERC)

RNS 16 November 2016

Mercia Technologies PLC

£1.0million investment in nDreams as part of £2.0million syndication

Mercia Technologies PLC (AIM: MERC, "Mercia" or the "Group") a national investment group focused on the creation, funding and scaling of innovative technology businesses with high growth potential from the UK regions, is pleased to announce a follow-on investment of £1.0million into nDreams Limited ("nDreams"), one of the UK's largest independent developer and publisher solely focused on virtual reality ("VR") gaming and experiences content.

Mercia's investment is part of a £2.0million funding round alongside a group of angel investors. The pricing of this funding round endorses Mercia's recent Half Year Results fair value assessment of its holding in nDreams. Since IPO, Mercia has invested £5.1million in nDreams and the Group now holds 41.0% of nDream's total issued share capital.

This additional capital will enable nDreams to further penetrate the VR market which, according to research from Digi Capital, is estimated to reach $30.0billion within the next four years. Having launched its award-winning game, The Assembly, on Sony's PlayStation VR in October 2016, following its successful debut on Oculus Rift and HTC Vive earlier in the year, nDreams has recently published Danger Goat (https://play.google.com/store/apps/details?id=com.ndreams.dangergoat&hl=en), its first title for Google on Daydream, Google's new high-quality mobile VR platform. Google is one of a number of partnerships nDreams has secured with the leading VR headset manufacturers, including Sony (PlayStation VR), Oculus (Rift), HTC (Vive) and Samsung (Gear VR). These high profile partnerships demonstrate the industry's confidence in the design and production quality of nDreams' experiences and games.

Mike Hayes, Mercia's Investment Director, Digital & Digital Entertainment, commented:

"We are delighted to continue our support of nDreams as part of this new funding round. nDreams has made considerable progress this year, as reflected by the recent £3.0million uplift in the value of our holding. This syndicated round is further testament to nDreams' growing status as a leading VR content developer and publisher.

nDreams exemplifies the benefits of Mercia's approach to identifying and investing in UK technology businesses. By combining our commercial and sector expertise with exciting opportunities and talented teams, we are seeking to build successful businesses across the UK's regions to create medium term incremental shareholder value."

Patrick O'Luanaigh, CEO and founder of nDreams, said:

"We are delighted that Mercia is continuing to support our growth by taking part in this syndicated investment, which is the first of a two-stage round. I am proud of the team of over 40 staff that we have assembled here at nDreams and this investment allows us to continue building on the momentum we have achieved, developing VR games and experiences of the very highest quality."

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About Mercia Technologies PLC

Mercia is a national investment group focused on the creation, funding and scaling of innovative businesses with high growth potential from the UK regions. Mercia benefits from 18 university partnerships and six offices across the Midlands, the North of England and Scotland providing it with access to high quality, regional deal flow. Mercia Technologies PLC is quoted on AIM with the epic "MERC".

Mercia's 'Complete Capital Solution' initially nurtures businesses via its third party funds (with more than £228.0million under management) and then over time Mercia can provide further funding to its 'Emerging Stars' by deploying direct investment follow-on capital from its own balance sheet.

Since its IPO in December 2014, the Company has invested over £30.0million directly across its portfolio of Emerging Stars.

About nDreams

nDreams was formed in 2006 by former Codemasters and Eidos Creative Director, Patrick O'Luanaigh (Tomb Raider: Legend, Hitman: Blood Money, Conflict: Desert Storm, Micro Machines V3) with a focus on virtual worlds. Since 2013, the company has exclusively dedicated its talents to developing remarkable virtual reality games and experiences. The studio has already worked on a number of VR titles - including SkyDIEving, Gunner, Perfect Beach and the award-winning The Assembly - and continues to develop multiple unannounced projects.