Deal focus: Hong Kong’s Gryfyn issues web3 passport
Gryfyn, the latest project from Hong Kong’s Animoca Brands, has attracted several VC investors, most of which are not existing backers of its parent. The mission is simple: expand the metaverse
The number of crypto wallet users globally grew by 6.3% during 2022 to about 85m, according to crypto exchange Huobi. But estimates for the number of users considered consistently active tend to fall in the 10m to 20m range.
Increasing the latter is a priority for Hong Kong’s Animoca Brands, a blockchain gaming studio that has raised more than USD 630m in private funding since 2021.
The company has pumped that money into various schemes around popularising non-fungible tokens (NFTs), virtual intellectual property, virtual ownership rights, and various web3 media plays. All of which is pretty esoteric stuff.
“If you buy a PlayStation, you don’t have to think about it. You just take that content and consume it. So far in blockchain, that’s not the case,” said Arnoldo Concepcion (pictured), co-COO of Animoca.
“If you’re not already in this space, you’re at a loss. If you get an NFT as a gift, you open a wallet to see it, but then what? You don’t know what to do. You may be curious, but you might just not come back to it. You can research what you can do, but that takes a lot of work.”
Concepcion is tackling this challenge with Animoca’s latest project, an NFT-focused wallet called Gryfyn. He’ll keep up his COO duties until the first quarter of next year, by which time he expects to be working full-time as CEO of the subsidiary.
Several external VC investors have been brought into the plan, including Liberty City Ventures, GameFi Ventures, Lavender Hill Capital Partners, Mind Fund, LeadBlock Partners, Angel Hub, and Brinc. They committed USD 7.5m.
This is not the first time an Animoca group company has received outside capital. Most notably, its virtual real estate platform, The Sandbox, raised about USD 95m from the likes of SoftBank Vision Fund 2, Liberty City, and Sun Hung Kai & Co.
Gryfyn is arguably unique, however, in the sense that it could be seen as Animoca’s first infrastructure play. Rather than addressing a specific area of interest such as gaming or digital property, the idea is to provide what Concepcion calls a “passport to different types of experiences in web3.”
The offering is similar to standard wallets in the sense that users can connect to decentralised finance platforms, trade on marketplaces, and use it as a repository for their NFTs. The twist is in a strong focus on usability, education, and security that is hoped to bring in newbies. Concepcion estimates two-thirds of Gryfyn first 3,000 accounts were opened by crypto novices.
The education aspect is mostly a matter of highlighting how NFTs can be used in various contexts. This can be an opportunity to cross-sell with other Animoca-affiliated web3 entities or send users into other parts of the broader metaverse.
The most common guidance in this sense will be about how a digital asset from one game can be deployed in another – but non-gaming applications around sports, music, and education are hoped to be a growing part of the mix. There are also fledgling plans to incorporate NFT ticketing functions for events and transportation.
Gryfyn was built on infrastructure provided by Hex Trust Group, a locally licensed and insured digital asset custodian that is also providing engineering support. Security vulnerabilities are said to be limited by making the product accessible as a web app rather than downloaded from a platform.
Japanese electronics and IT company NEC has also signed up as a partner and is expected to help incorporate biometric authentication and secure computation, among other technologies. NEC said its aim was to expand the digital wallet market and business opportunities.
“I think this year and next year, there’s an opportunity to build real business models, whereas in 2021, everything that you put into the market would sell. That wasn’t a bad problem to have, but in some way, it doesn’t present the same urgency in coming up with long-term ideas that can make an impact,” Concepcion added.
“We’re seeing that kind of movement and passion again, and I think that’s very positive. That’s what we’re doing with our partners – looking at the problems they’re facing and potential solutions and coming up with ideas based on that.”
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.