Animoca Brands will pay an upfront sum of $5 million in the all-stock deal. In addition to that, it will also add up to $3 million of earn-out payment based on the company’s annual profit achievement in the next three years.
Per the agreement, Animoca will grant $1 million earnout payment each year if Quidd achieves a $1.25 million of net profit in the first year, $1.5 million in the second year and $2 million in the third year.
Animoca has acquired Quidd from its co-founder Michael Bramlage as well as various non-founder shareholders. The completion of the deal is subject to shareholders approval and due diligence.
The Australia-listed company will fund the Quidd acquisition with its recent capital raise of A$8 million led by its key strategic investor Harmony, as well as other participants CCBC, Tribeca Investments, Perennial Value Management, SG Hiscock, Sun Hung Kai Financial, and few individual investors.
The funds will also be used to enable further expansion by bringing Quidd into Asian and European markets.
According to the statement, the acquisition of Quidd will bring the intellectual property (IP) and media relationships to Animoca Brands and provide opportunities to expand its virtual goods and digital collectibles strategy.
Launched in 2016, Quidd claims to have the world’s largest assortment of digital collectibles licences and partnerships with over 325 individual brands.
Quidd has issued and sold over 2.1 billion individually-serialized digital collectibles. Quidd had an average of 208,000 monthly active users for the first half of 2019, with a majority of them based in the US.
Since its launch, Quidd has built a community of 6.8 million users who collectively own more than 2.1 billion digital collectibles on its platform. The community is mostly located in the US with a small minority of users located in Canada and Australia.
In November 2017, Quidd raised $13 million in a Series A funding led by Sequoia Capital. Quidd has generated over $10 million in total transaction value from the sale of digital collectibles on its app.