Perfect Corp., a Taiwan-headquartered virtual beauty try-on app developer, announced on Thursday it is merging with a blank check company to go public in the U.S. at a valuation of $1 billion.

Founded in 2015, Perfect Corp. markets itself as a leading artificial intelligence and augmented reality beauty and fashion tech solutions provider. The applications it has developed allow users to analyze the condition of their skin and virtually try on makeup, hair and nail colors, as well as other accessories. 

The company said its technologies have been deployed by more than 420 beauty brands in over 80 countries, including Estee Lauder Companies’ brands Mac and Clinique. It has also partnered with Facebook’s parent company Meta, Snapchat’s operator Snap, as well as Alibaba’s e-commerce sites to offer makeup try-on tools on each of their respective platforms. 

Perfect Corp. said Thursday that it has entered into a definitive agreement to merge with Nasdaq-listed Provident Acquisition Corp. The business combination is expected to provide Perfect Corp. with up to $335 million of proceeds, including $50 million raised through a private investment in public equity, or PIPE, from investors including luxury fashion brand Chanel, cosmetic company Shiseido, as well as Snap, among others. The SPAC deal is expected to be completed in the third quarter, Perfect Corp. said. 

Perfect Corp.’s roster of investors includes Goldman Sachs, Alibaba and CyberLink, a Taiwan-listed multimedia software company, among others. The firm said it has “come close to breaking even” for the past three years.

The merger will allow Perfect Corp. to expand its business, most of which is currently in the U.S. and Europe, further into Southeast Asia and the Middle East, founder and CEO Alice Chang told Forbes. The company is also planning to expand its virtual try-on offerings to cover more categories and more online platforms, she added.

“Beauty product users don’t just shop in physical stores, but also on social media and online sites. So we need to expand our technologies, not just on the brand side, but also on every platform,” Chang said. “We want to become an augmented reality powerhouse, using our technology to solve different pain points of users in different areas and regions.”

Augmented reality applications have been gaining in popularity during the pandemic because many brick-and-mortar stores carrying beauty and fashion products were forced to shut down, and moreover, physically trying on such goods raises safety and hygiene concerns. Luxury brands like Louis Vuitton and Gucci have already adopted the nascent technology, allowing customers to virtually try on their sunglasses and sneakers before making purchases.  

Chang added that Perfect Corp. has plans to jump on the metaverse bandwagon. The term, which has recently become a buzzword after Facebook changed its name to Meta, refers to a digital realm that combines the technologies of gaming, social media, cryptocurrencies, ​​augmented and virtual reality in a forum where users can interact virtually. Chang said she believes virtual try-on will play a key role in making customer engagement interactive in the metaverse. 

Chang founded Perfect Corp. in 2015 as a spinoff from CyberLink, where she served as the CEO for nearly two decades, developing technologies like facial recognition. As a self-described beauty lover, Chang said she wanted to deploy augmented reality technology to help customers avoid mistakes such as buying the wrong shade of makeup products. 

Perfect Corp. also operates virtual makeover and photo editing consumer mobile applications. The company said its apps have achieved more than 950 million downloads globally and enabled user to virtually try on products about 10 billion times last year.

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