This mantra comes from the dhātu of the first verbal group – अव् / av, which means – रक्षण / rakṣaṇa – ‘protection’ (receiving from God, Ishvara). The semi-vowel labial व् / v is transformed into labial उ / u, then it is transformed into ओ / ou with the addition of labial and मन् / man, where only the nasalized म् / m remains, that can turn into a bindu.
This famous mantra is also called प्रणव / praṇava, from the prefix प्र / pra and the root णु / ṇu, which means ‘adoration’. But in this case, the vowel उ / u goes into a strengthened अव / ava, that gives णव / ṇava with the prefix प्रणव / praṇava. In a word, all together this can mean ‘the primary, initial adoration’ from which all forms of worship come from.
There are many other esoteric interpretations of praṇava. The most famous is its splitting into three mātras (अ – उ – म्), to which many traditions give very different meanings.