Hong Kong's Animoca Brands raises $359m at $5b valuation
US-based Liberty City Ventures has led a USD 359m round for Hong Kong blockchain media company Animoca Brands at a pre-money valuation of USD 5bn, more than double its valuation in October.
Animoca Brands develops non-fungible tokens (NFTs) – individually unique cryptographic assets – for use in brand-connected games. It has gradually expanded this concept to non-gaming applications, helping brands establish NFT-based footholds in the metaverse, an immersive internet.
The company raised USD 65m from a group featuring Sequoia Capital China and Liberty City in October at a pre-money valuation of USD 2.2bn. It achieved unicorn status as recently as May 2021, following an approximately USD 89m round that also included participation from Liberty City.
It brings total funding since the start of 2021 to around USD 204m, according to AVCJ Research. The fresh capital will be used to grow the company’s metaverse business, which includes Sandbox, a virtual real estate and social engagement platform.
Sandbox, not to be confused with virtual reality company Sandbox VR, is a wholly-owned subsidiary of Animoca that has raised substantial funding in its own right. SoftBank Vision Fund 2 led a USD 93m Series B round for the platform in November that also featured Liberty City.
Liberty City was joined in the latest round by Sequoia China, Gobi Partners, Kingsway Capital, C Ventures, Mirae Asset, Provident Capital, Pacific Century Group, Smile Group, and Soros Fund Management.
Additional contributions came from 10T Holdings, Delta Fund, Gemini Frontier Fund, L2 Capital, Mirae Asset, ParaFi Capital, Senator Investment Group, Stable Asset Management, Wildcat Capital Management, and Winklevoss Capital among others.
Animoca’s core technical offering is the development of NFT-based in-game rewards and means for players to monetize gameplay. The technology delivers individual users with virtual assets with property rights that extend beyond the context of the game.
This in turn allows users – including individuals, brands, and other organisations – to exercise virtual property rights under the metaverse concept. In Sandbox, for example, the likes of New World Development, South China Morning Post, PwC, Adidas, Atari, and Snoop Dogg have begun acquiring virtual real estate and establishing crypto-based operations in a micro-economy.
“We have set ourselves the ambitious goals of building an open Web 3.0 and facilitating an open metaverse that expands financial inclusion,” Yat Sui, co-founder and chairman of Animoca, said in a statement. “We believe we are still at the initial stages of a new internet revolution, and there are tremendous opportunities ahead of us in 2022 and beyond.”
NFT technology became a household word last year, with early applications in the 3D art industry quickly splintering into other business ideas such as virtual ticketing. PwC said total NFT investment jumped from USD 13.7m in the first half of 2020 to USD 2.5bn in the first half of 2021.
The metaverse has proven the natural extension of this technology by providing a forum, where individually distinct properties can be traded, shared, displayed, and otherwise used by their owners. For investors, initial interest in the metaverse has focused on real estate land grabs, play-to-earn gaming micro-economies, and new ways of marketing intellectual property.
Animoca is attempting to diversify business modelling in the metaverse through a partnership with Hong Kong accelerator Brinc. The program, known as Launchpad Luna, raised USD 130m in December. Its first cohort includes start-ups focusing on entertainment, NFT lending, crypto e-commerce rewards, and identify verification among other ideas.
“The trailblazing Animoca Brands is demonstrating to the world the game-changing characteristics of Web 3.0 and the open metaverse,” Murtaza Akbar, a managing partner at Liberty City, added. “Animoca Brands is championing a more decentralized, open, fairer, and more inclusive future where everyone can truly own their digital goods and benefit from them accordingly.”
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