Amid NFT frenzy, HK-based Animoca Brands nets $89m to enter unicorn club

Photo by Andre Francois on Unsplash

Animoca Brands, a Hong Kong-based firm that develops digital property rights to games through non-fungible tokens (NFTs), announced on Thursday that it has raised nearly $88.9 million in a new funding round to reach the unicorn valuation of $1 billion.

London-based Kingsway Capital; RIT Capital Partners (formerly Rothschild Investment Trust); and HashKey Fintech Investment Fund joined the round.

A slew of other investors includes Taipei-based AppWorks Fund, LCV Fund, cryptocurrency exchange operator Huobi Group, Singapore-based family office Octava, Australian investment management firm Ellerston Capital, Perennial, Axia Infinity Ventures, crypto fund SNZ, US VC firm Liberty City Ventures, and crypto-exclusive fund Metapurse, among others.

In a statement, Animoca said that it secured the new round through the issuance of 93.4 million new ordinary fully paid shares at a subscription price of A$1.1 (approximately $0.85 based on the exchange rate on May 13, 2021) per share.

The firm will use the investment to fund further acquisitions and strategic investments, develop new products and secure additional licenses for popular intellectual properties (IPs) in the NFT and gaming sectors.

High-profile NFT adoptions

Animoca achieved the unicorn valuation as NFTs – virtual assets that exist on a blockchain ledger – have gained good traction this year. Its rising popularity was propelled by the adoption of companies including Elon Musk’s Tesla, which is already accepting bitcoin as payment for its electric cars.

US payments giant PayPal last year started allowing customers to buy, sell, and hold cryptocurrencies using its online wallets. The latest prominent adopter, e-commerce firm eBay, earlier this month said it would allow the sale of NFTs on its platform.

One of the investors in the round, Huobi, just launched an investment arm today with $100 million to acquire early-stage blockchain companies that can be integrated into its existing businesses. For the unit, it set aside $10 million specifically for investments in NFTs.

Animoca initially started as a mobile game publisher in 2004 before it branched out to develop NFTs in early 2018. The company saw this funding round being “heavily contested” by investors, said Yat Siu, co-founder and chairman of Animoca, during an online media briefing.

Investors are betting on this nascent yet highly promising sector using the growth trajectory of the Internet. Siu said: “You should expect more developments in the space, in a way similar to how the Internet developed in 1999 and 2000. We are kind of in that era for NFTs.”

Gaming sector as a starter for NFTs

Siu and his team at Animoca target to capture opportunities in the global burgeoning NFT market through the mobile game sector – an area where most users share a better understanding of virtual goods.

Siu, a Hong Kong-based entrepreneur and investor founded Animoca in 2014, largely through a spinoff of the licensing and publishing portion of his early venture Animoca’s app portfolio. The firm, which offers video gamers digital property rights using blockchain and NFTs, develops and publishes a portfolio of products like the REVV token and SAND token; original games including The Sandbox, Crazy Kings, and Crazy Defense Heroes; as well as products utilising IPs, such as Formula 1®, Marvel, WWE, Power Rangers, MotoGP, and Doraemon.

Its portfolio of blockchain investments and partnerships includes Sky Mavis (Axie Infinity), Dapper Labs (CryptoKitties and NBA Top Shot), OpenSea, Harmony, Bitski, and Alien Worlds. It has subsidiaries including The Sandbox, Quidd, Gamee, nWay, Pixowl, and Lympo.

“People have difficulty in understanding what digital property means, and appreciating the value of that,” said Siu. “The reason why we started focusing on gaming is that gaming is the typical sphere where most people play mobile games and understand virtual goods.”

“The way we’re going to get to [NFT] adoption, we think, is through gamers,” said Yat. He added that the introduction of NFTs to mobile games can also offer “rewards” and “more productive time” to gamers in what would have been just an entertainment activity.

Animoca recorded A$49 million ($37.8 million) in total unaudited revenue and revenue received in advance for the 10 months ended October 21, 2020. Its combined NFT sales stood at $13.3 million as of April 20, 2021, according to its website.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.