Animoca Brands, a venture capital firm and web3 game developer, has denied recent reports that it has scaled back its metaverse fund target and experienced a significant drop in its valuation. The company refuted claims that it had reduced its metaverse fund target by $200 million, or 20%, to $800 million amid volatility in the crypto market and instability in the banking sector. The firm also downplayed suggestions that its valuation had plummeted from $6 billion as of July 2022 to roughly $2 billion in March 2023.
These claims were made in a March 24 Reuters report that cited anonymous “people familiar with the matter.” According to the report, Animoca initially halved its $2 billion metaverse fund target in January and recently cut it by another 20% to $800 million. However, Animoca co-founder and chairman Yat Siu had previously outlined that the fund target was between $1 billion and $2 billion, depending on how much capital was raised.
The metaverse fund, which was announced in November 2022, was designed to allocate capital to mid-to-late-stage startups with a metaverse focus. Animoca acknowledged that the banking collapses in the United States have had an impact on fundraising but stressed that the final amount raised for the fund has yet to be determined.
“While there’s no doubt that the FTX and banking crises have had a serious impact on available venture capital, fundraising for the Animoca Capital fund is in progress,” the firm stated. “When the raise is concluded, we will inform the market with the appropriate details, including the final size of this fund.”
In terms of its valuation, Animoca asserted that the figures reported by Reuters and other unnamed sources were inaccurate. The company, which trades as AB1, was initially listed on the Australian Stock Exchange (ASX) in its early days. However, AB1 was delisted back in March 2020 due to the ASX’s assertions that Animoca had breached its listing rules by being involved in crypto-related activities, among other things.
Since then, its shares have traded on unlisted stock-focused exchanges such as the Sydney-based PrimaryMarkets. The data from this platform was used to calculate a total market cap of AB1 at around roughly $2 billion. However, Animoca argues that these figures don’t fully represent the company’s total valuation.
“The claim […] that Animoca Brands ‘now trades its shares on PrimaryMarkets’ is not technically correct. We terminated our arrangement with PrimaryMarkets in the second half of 2020, but PrimaryMarkets chose to continue to trade Animoca Brands shares on its platform,” the firm stated. “We do not consider the thin trading activity on PrimaryMarkets to accurately reflect the company’s value. Trading volume is far too low to provide the price accuracy you would find on an actual primary market.”
Despite the challenges faced by the company, Animoca remains committed to its mission of developing web3 games and supporting startups focused on the metaverse. The firm has been at the forefront of the booming metaverse industry and is well-positioned to capitalize on its growth. As the industry continues to evolve and mature, it will be interesting to see how Animoca Brands navigates the challenges and opportunities that lie ahead.