Animoca Brands Cuts Metaverse Fund Target to $800M
In recent news, Animoca Brands has reportedly reduced its target for its metaverse fund by a further 20% to $800 million, according to sources familiar with the matter. The company has scaled back on its billion-dollar goal due to the volatility in the crypto sector. Animoca Brands had previously announced in November 2022 that it was working on a new Animoca Capital fund with a target of $2 billion, but then halved that target to $1 billion in January 2023.
Two sources familiar with the matter disclosed that Animoca Brands' market capitalization, which was previously valued at roughly $6 billion following a Temasek-led financing round in July 2022, has fallen to below $2 billion. The sources also shared that the company's shares are trading at a considerably lower valuation in secondary markets. The decreased fundraising target and declining valuation signal a change in sentiment on the crypto industry, as excitement around such technologies has dwindled following scandals ranging from the collapse of FTX to the bankruptcy of several crypto lenders.
In 2022, Animoca Brands was named the most funded metaverse developer by Nasdaq, with Animoca having the most metaverse deals in 2022, closing 15 deals and receiving over $564 million in funding. As a prominent player in the metaverse industry, Animoca Brands holds a majority stake in The Sandbox, a leading metaverse platform. Apart from this investment, the company has actively participated in developing nonfungible tokens (NFTs) and GameFi.
Yat Siu, one of Animoca Brands' co-founders, has stated that GameFi is expected to become one of the main gateways for the general public to access the metaverse. With the decreasing target for its metaverse fund and declining market capitalization, Animoca Brands' focus may shift towards developing GameFi and other related projects.
It is worth noting that the metaverse has been a hot topic in the tech industry, with companies like Facebook and Roblox investing heavily in it. However, the hype around the metaverse has been tempered by concerns about its potential impact on privacy, security, and social inequality. As the metaverse industry evolves, it will be interesting to see how companies like Animoca Brands adapt and navigate the challenges and opportunities that lie ahead.