Digital Domain Holdings, operator of the world’s largest independent visual effects studio, has raised fresh investment to expand its virtual reality business under new deals worth HK$309 million. In a filing with the Hong Kong stock exchange late on Monday, Digital Domain said it agreed to allot and issue 181.82 million shares to the virtual reality-focused Munsun VR Fund, a limited partnership managed by Munsun Asset Management (Asia) that is owned by China Precious Metal Resources Holdings . The subscription price of 55 Hong Kong cents a share represented a discount of 6.78 per cent to the average closing price per share of 59 HK cents for the five consecutive trading days immediately preceding the date of their agreement. In addition, Digital Domain agreed to place 380 million shares at the same price to undisclosed professional, institutional and other investors. According to Digital Domain, net proceeds from those deals total HK$306.63 million. It will be applied to the firm’s media entertainment business and general working capital. At the resumption of trading on Tuesday, Digital Domain’s shares tumbled 4.92 per cent to close at 58 HK cents. The company requested for a halt in trading on Monday pending its new subscription announcement. The Munsun VR Fund transaction marked the latest deal landed by Digital Domain over the past few days to help build up its virtual reality business. Red-chip Citic , the biggest conglomerate in China, and private equity firm SB China Venture Capital agreed last Friday to a combined HK$200 million subscription to new shares of Digital Domain. “As Digital Domain’s footprint broadens, we are always looking for opportunities to grow our media and entertainment business and further penetrate the virtual reality market,” Digital Domain chief executive Daniel Seah Ang said in a statement on Monday. The company owns and operates the world’s largest independent visual effects company, Digital Domain 3.0, with headquarters in the United States. Canadian subsidiaries Immersive Ventures and IM360 Entertainment are involved in creating original virtual reality content. According to research firm IDC, the global market for virtual and augmented reality hardware, software and services is predicted to reach US$162 billion by 2020. In July, Seah said at a conference in Beijing that Digital Domain was gearing up to expand its virtual reality content for Chinese consumers as the company pursues new growth. “Our business model in China is different as we want to partner with more local companies to diversify our income,” Seah said. Digital Domain has formed alliances with Alibaba Group-backed online video service Youku Tudou and highly diversified digital entertainment provider Leshi Internet and Information Technology, widely known as LeEco. New York-traded Alibaba is the owner of the South China Morning Post . In January, Digital Domain established a new subsidiary called DDPO, which is responsible for growing its visual special effects, computer graphics, virtual reality, 360 panorama video recording and digital human rendering services for mainland Chinese cinema, television, commercial advertising, concerts and sports events. “Virtual reality in China will experience explosive growth in 2016 amid an increasingly enriched content ecosystem,” IDC analyst Neo Zheng said in a report. In August, Digital Domain reported a wider interim net loss of HK$158.88 million, compared with a HK$76.39 million deficit in the same period last year. It said the shortfall this year was caused by several factors, including increased administrative and operating costs, and operating losses from its media entertainment business. Revenue, however, grew 19 per cent to HK$348.13 million, up from HK$293.49 million a year earlier.