Animoca Brands Hits $5.9 Billion Valuation As Crypto Winter Deepens

Blockchain game maker and crypto investor Animoca Brands has secured $75 million in a funding round that values the Hong Kong-based company at $5.9 billion.

Investors of the round include existing backers Liberty City Ventures, Kingsway Capital and 10T Holdings, among others, Animoca said on Tuesday. The round is a second tranche of the $358,888,888 fundraising announced in January, which was extended for due diligence purposes. The proceeds will be used for acquisitions and investments, Animoca said, as well as product development and licenses for intellectual properties.

Animoca’s latest move to bag more capital comes as the crypto market continues its descent into the doldrums. The insolvency of Singapore-based crypto hedge fund Three Arrows Capital has sent some of its counterparties scrambling to recover assets and recoup losses.

The market’s cascading losses follow the meltdown of the Terra stablecoin and the Fed’s interest rate hikes that drove investors to offload risky assets. The market value of all cryptocurrencies has plummeted 70% from its peak of $3 trillion in November, according to tracker CoinGecko.

“There is no question that the fundraising environment has become more challenging, but at the same time the current crypto climate has also enabled some users to gain a better entry point to the open metaverse,” Yat Siu, cofounder and chairman of Animoca, said in an email. “Of course, we have to be a bit more prudent, but we have a long-term vision for this space and are both committed and patient.”

Just last week, Animoca led a $32 million financing round of blockchain game maker Planetarium Labs. It has also acquired Prague-headquartered Notre Game, which is advancing into blockchain gaming. The sector has remained relatively resilient amid the market downturn. It recorded only a 5% drop in unique active wallets in the second quarter, compared to a 26% decrease in the wider crypto industry, data from DappRader shows.

Yat believes that the wider industry will recover within the next one to two years. “Similar to how Covid has highlighted systemic problems in the physical world and driven more people to spend online, the current economic circumstances will highlight opportunities in the open metaverse,” he said. “New businesses are emerging in the metaverse that are growing in defiance of the recent market trend, providing more employment and services that help to power the virtual economy.”

Animoca was established in 2014 to develop smartphone and tablet games. The company ventured into blockchain gaming in around 2018, creating mega hits such as the Sandbox, a decentralized virtual world. The company has also been actively investing in crypto and blockchain startups. It has already built a portfolio of more than 340 investments, including leading NFT marketplace OpenSea and Dapper Labs, the developer of blockchain game CryptoKitties.