Hong Kong-based blockchain gaming developer Animoca Brands has cut its target for its so-called metaverse fund by 20% to $800 million, people familiar with the matter said, in a further scaling back of its ambitions following volatility in the crypto sector.
Animoca Brands said in November that it was working on a new Animoca Capital fund with a target of $2 billion, but then halved that target in January to $1 billion. Recently, it has trimmed the target by another 20% to $800 million, two people familiar with the matter said. The sources declined to be named as they were not authorised to speak to the media.
Animoca Brands was valued at about $6 billion last July after a financing round led by Singapore-based Temasek but it has seen its shares trade at a much lower valuation in secondary markets recently, with its market cap slipping to below $2 billion, two other people said. The company, which was listed in Sydney until 2020, now trades its shares on PrimaryMarkets, a private secondary share trading platform. Latest data on the platform show that the company’s market cap stood at just under 1.9 billion Australian dollars ($1.26 billion) earlier this week.
A spokesperson for Animoca Brands declined to comment on its fund raising plans. He said the company was aware that its shares were trading at a discount on PrimaryMarkets, but said the platform did not provide a reliable indicator of value.
Animoca’s cut to its fund raising target and declining valuation reflect a change in sentiment on the crypto industry as excitement around such technologies has lost steam following scandals stemming from the collapse of the FTX exchange to the bankruptcy of several crypto lenders. Animoca Brands was removed from the Australian Securities Exchange in 2020 by the regulator because of its aggressive expansion into the cryptocurrency industry.
Its expansive presence in crypto later positioned it to become a crypto giant in 2021 and 2022 at the peak of the crypto boom, with a series of large investments boosting its valuation by nearly 600%. In January, its co-founder Yat Siu told Reuters that the company had invested in more than 380 companies including Axie Infinity and OpenSea to build its vision of a “metaverse” based around blockchain technology, in which users can buy and trade digital assets in the form of non-fungible tokens.