The Latest: Scienjoy Holding Corp. (SJ.US), operator of an entertainment livestreaming platform in China, announced on Wednesday it will invest $3 million to acquire 30% of DVCC Technology LLC, a Dubai-based metaverse company.

Looking Up: Scienjoy said the move reflects its intent to transform into a metaverse company focused on the Middle East and North Africa (MENA) region.

Take Note: The metaverse burst onto the scene two years ago, when Facebook embraced the virtual technology. Since then, Facebook, which changed its name to Meta (META.US), has cut back its efforts in the area, though many other companies continue to aggressively develop the technology. 

Digging Deeper: Founded in 2011 and listed on the Nasdaq in 2019, Scienjoy was one of a number of livestreaming companies to emerge in China about a decade ago, seizing on a boom for the popular live format with interactive features. The company posted steady double-digit revenue growth for most of its history, but that momentum stalled this year amid stiff competition and a regulatory crackdown. Scienjoy said the new investment will assist in its “transition from mobile entertainment to metaverse lifestyle,” betting on the big potential for future metaverse applications that allow people to participate in activities virtually. DVCC’s main metaverse product is the “Dubai Verse Cup,” which will bring metaverse technology to horse racing through an exclusive partnership with the Dubai Racing Club.

Market Reaction: Scienjoy shares rose 5.7% on Wednesday in early trading after the announcement. The stock now trades in the middle of its 52-week range.

Reporting by Doug Young

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