Hong Kong NFT player raises $89m at $1b valuation

NFTs are blockchain-based assets that – unlike popular cryptocurrencies – are considered individually distinct and uninterchangeable. The idea is to leverage the cryptography and disintermediated nature of blockchain technology to ensure the authenticity, uniqueness, and irreproducibility of virtual assets. Many early applications have focused on ownership of digital art.

Animoca is using NFTs to further monetize immersive games by selling in-game rewards and virtual property rights.

Its latest funding round brought in the likes of Kingsway Capital, Ellerston Capital, Perennial Value Management, AppWorks Fund, Liberty City Ventures, Singaporean family office Octava, and RIT Capital Partners, formerly Rothschild Investment Trust. Specialist crypto investors included SNZ, HashKey, LCV Fund, Huobi Global, and Metapurse.

"The emergence of digital property rights, whether via Bitcoin or NFTs, is perhaps the greatest opportunity for financial inclusion for the bottom three billion frontier and emerging market consumers, as well as an opportunity for a more decentralized and thus more equitable global internet," Manuel Stotz, founder and CEO of Kingsway, said in a statement.

Animoca was founded in 2014 with a focus on mobile games and subscription products that feature gamification, blockchain, and artificial intelligence. It went public in Australia via a reverse merger with defunct mining player Black Fire Minerals.

The Australian Securities Exchange delisted the company last year citing breaches of its rules, including "involvement in cryptocurrency-related activities." Animoca contested the claims and pledged to continue its usual operations as a private company.

Revenue improved 47% during the 2019 financial year to A$8.3 million ($6.4 million) as a profit of A$1.5 million the prior year swung to a loss of A$7.9 million. The loss was attributed in part to game development expenses and the amortization of intellectual property (IP) rights. The company recorded unaudited revenue of A$49 million for the first 10 months of 2020, citing sales traction for several games.

Animoca has had success with titles such as F1 Delta Time, The Sandbox, and MotoGP Ignition. The company has also produced games based on popular IP rights such as Garfield and Star Trek. It has previously received investment from M7 Alternative Investment Strategies Asia, Mind Fund, Blocore, Hashed Ventures, and Helix Accelerator.

There has also been significant growth through investment in companies in adjacent technologies, including US-based OpenSea, which claims to be the largest decentralized marketplace for blockchain-based assets globally, and Vietnamese blockchain games maker Axie Infinity. Earlier this week, Axie Infinity raised a $7.5 million Series A round from a group including 500 Startups.

Animoca will use its fresh capital to make additional acquisitions, secure further IP licenses, and advance its NFT property rights projects. The company cites IDC research estimating that innovative in-game monetization ploys represented a $179.7 billion market in 2020.

"We always maintained that gaming would be one of the first massive adopters of blockchain, and Animoca Brands is definitely the top game-changer in this field," Deng Chao, CEO of HashKey, added. "Animoca Brands is redefining property rights for gamers and paving the way toward a new era for gaming."

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• Topics
• Greater China
• Consumer
• Technology
• Expansion
• Media
• Hong Kong (China)
• blockchain
• gaming
• Cryptocurrency