One of the top whales in encrypted games and NFTs, it took only 5 years from the brink of delisting to a $6 billion valuation

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Author: Dabai / Source: Vernacular Blockchain


This is the 1740th original issue of the vernacular blockchain

Author | Huo Huo

Produced | Vernacular Blockchain (ID: helloBTC)

I believe that old friends who follow NFT and Metaverse have heard of Animoca Brands. At present , it has invested in more than 150 NFT/metaverse projects, and participated in the investment of the most popular metaverse project , The Sandbox. In addition, it also owns shares in most star NFT projects, including OpenSea (the largest NFT platform, with an estimated revenue of 2021). $375 million), Dapper Labs, and Sky Mavis (developer of Axie Infinity), among others.

According to news on August 30, Temasek (Singapore’s largest company) will lead a new round of financing of $ 100 million in Animoca Brands through convertible bonds. This round of financing will be Animoca Brands announced in January this year. Replenish. This is also the largest financing Animoca has ever received. It was led by Liberty City Ventures, with participation from both the “financial predator” Soros Fund Management Company and Sequoia China, which has invested in half of China’s Internet.

Animoca Brands as a whole is now valued at about $6 billion.

Looking back at the changes in the market value of Animoca Brands in the past two years, we can find that this company is indeed developing rapidly.

Because the market value of the company in March 2020 was only around $100 million, starting from May 2021, the company has completed four rounds of huge financing of more than $50 million in less than a year. Management ability and grasp of the market have achieved the current US$6 billion.

For the uninitiated, Animoca Brands looks like a top player in the crypto industry out of thin air. So, how did it start, how is it now, and where is it going? The vernacular blockchain will take you to understand it today.


Unfavorable apprenticeship almost died

Animoca Brands is a Hong Kong company founded in 2014 by Yat Siu (Chinese name Xiao Yi).

Yat Siu is the founder and chairman of Animoca Brands. In his more than 20 years of Internet technology entrepreneurial journey, he has many splendid resumes and achievements. Growing up in Vienna in the 1980s, due to his Chinese ancestry, he found it difficult to fit in. Fortunately, with his passion for technology since childhood, he found refuge in computers and the booming Internet and relieved his loneliness.

After dropping out of university and participating in several startups, Siu settled in Hong Kong in 1995, where he founded Asia’s first free web and electronic service provider. In 1998, he founded Outblaze, a game development and web services business, and after winning multiple awards, he sold the company’s cloud division to IBM in 2009 for hundreds of millions of dollars. After that, Xiao Yi focused more on the new track at the forefront of investment, using the millions of dollars he had previously obtained to help the company recapitalize. In 2014 Animoca Brands came into being.

At the beginning of the establishment of Animoca Brands, Yat Siu positioned it as a mobile game, mainly focusing on mobile game R&D and distribution business, and the business scope even involved e-books for a time. Compared with ordinary mobile game companies, Animoca pays more attention to IP-licensed games, and has successively developed super-IP-licensed mobile games such as “Garfield”, “Doraemon”, and “Astro Boy”.

In January 2015, it was listed on the Australian Securities Trading Platform (hereinafter referred to as “ASX”). Although there are certain works, the long-term business performance is mediocre, and multiple financings are needed to supplement cash flow. According to relevant reports and data, Animoca Brands has conducted a total of 9 rounds of 1PO financing from 2015 to 2019, with a cumulative amount of 34.3 million US dollars to promote various mobile games, e-books, VR, chain games and other businesses, but all of them have achieved great results. micro.

As of the fourth quarter of 2017, its quarterly operating cash flow has been negative. Data shows that the company’s share price fell below A$0.01 from the previous high of A$0.2 in August 2017, a drop of more than 95%.


Source: 61finance

In the second half of 2017, under the pressure of ASX’s performance inquiries, Animoca Brands carried out three reforms to streamline costs and increase revenue: adjusting the compensation structure of directors, selling non-core assets, and laying off staff, of which all executives took a 50% pay cut. %. During the year, the company sold 318 of its 524 mobile games — most of them casual — for a total of $8 million, and slashed its headcount from more than 110 to less than 70.

Therefore, before entering the blockchain at the end of 2017, it can only be regarded as an unknown mobile game developer and publisher, and it is also facing a delisting crisis.


Transforming an encrypted enterprise, returning domineering

From 2017, when it was about to be delisted from the ASX, to this year, after five years, the total number of employees in the company has jumped to more than 600 people around the world, and it has become a unicorn company on the NFT track. What happened in the middle? Its coming back to life?

The change originated from the beginning of getting involved in the blockchain and NFT market, and 2017 is a turning year.

At the end of 2017, Animoca Brands began to approach a game company that had participated in the development of Cryptokitties (a blockchain game that can collect, breed and sell virtual cats). According to the interview report at the time, Siu said: “This is our first involvement in blockchain games and NFTs. We immediately realized the power and benefits of this, and how NFTs will provide players with digital property rights. Realize a disruptive revolution,” said that since then, Animoca Brands has focused on NFT-based games.

In the following 2018-2019, everything changed. Animoca Brands has been delisted from the ASX to focus on NFTs and cryptocurrencies. In these two years, Animoca has successively invested in Sky Mavis, the developer of Axie Infinity, OpenSea platform (the largest NFT platform in the world), Wax and Decentraland, and also acquired Sandbox.

In fact, in 2018, when encryption technology was still in a very early stage of development, the investment risk was very high, and Animoca was one of the few companies that were firmly optimistic at that time.

Founder Siu said that everyone knows Bitcoin and that decentralization is a technology. But what really attracts Animoca is not FT about money, but what NFT stands for. That’s why Animoca decided to go all out, Animoca came when the market was really getting ripped off (the 2018 crypto market crash, also known as the “crypto winter” of 2018), in a broader investment sense. It also gave Animoca a lot of opportunities.

Some time ago, according to the unaudited main financial and business report data released by Animoca Brands from the last three months of 2021 to the first four months of 2022, Animoca Brands has invested in more than 340 projects with a total investment amount of US$1.5 billion. Investment projects mainly involve blockchain games, e-sports, guilds, metaverse, art, markets, decentralized finance, infrastructure, encrypted wallets and other types.

This report does not fully count the 312 projects that Animoca Brands invested in between June 30, 2017 and June 30, 2022. The data shows that the top three investment fields of Animoca Brands are Blockchain Gaming, Infrastructure, and Decentralized Finance (DeFi) .

image.png Animoca Brands Investment Layout

Judging from the distribution of investment projects led by Animoca Brands, among the 312 projects, Animoca Brands led 84 projects and participated in 119 projects. and 18.

image.png Animoca Brands Investment Distribution

2021 is known as the year of “NFT”, and the field of encryption has ushered in explosive growth. In this year’s upsurge of NFT and metaverse concepts, Animoca Brands has also gained fame and fortune, becoming one of the biggest winners.

There were 66 investments in the first half of this year, totaling more than $185 million, with an average of 11 deals completed per month. The gaming sector accounted for the largest number of investment projects, with 28 transactions, and about two-thirds of the investment went to games and infrastructure. In May, transactions fell sharply, probably because the entire crypto market was dragged down by the collapse of Luna/UST at that time. Its investment frequency resumed in June, and the month’s spending was the highest in the first half of the year. However, Animoca Brands announced only one investment in July. The June project may have been completed in May with a delayed announcement. Animoca Brands may be slowing its own investment rhythm.


In general, it began to set foot in the blockchain and NFT market in 2017, after several years of rapid growth. Animoca Brands has developed into a blockchain technology unicorn and a metaverse giant.


Stay calm and objective, and firmly believe in the future of the crypto industry

In addition to releasing its own NFT-powered games, including The Sandbox, an ethereum-based metaverse experience, Animoca has been making a ton of acquisitions. Since the beginning of the year, Animoca has acquired development studios Eden Games, Darewise Entertainment and Grease Monkey Games. It can be seen that Animoca Brands’ investment theme this year is simple and straightforward, including two key words, “digital property rights” and “open metaverse”.

In an interview, Siu said that in a centralized game platform, players’ rights and interests cannot be guaranteed, but in a decentralized on-chain world, all programs are executed by smart contracts, which are not at all transferred by the platform’s will. And he believes that when blockchain technology becomes the infrastructure in the future, the popularity of chain games will continue to refresh the public’s cognition. Their investment philosophy is to provide funds for web3 innovation projects that are conducive to the emergence of the open metaverse.

And he believes that it is very important to seize the opportunity in investment, but the timing is difficult to judge, especially in the future with infinite potential, but the current does not fully demonstrate its value, so the best way is to enter the game as soon as possible. The cost will be higher. Just like he got into early-stage companies in 2018 and 2019. Plus, he said, Animoca Brands is an out-of-pocket investment that allows it to stay long-term without being mired in short-term returns.

So Animoca Brands generally enters the market in the seed round and the A round. Yat Siu said they are working capital, not financial capital. It can also be seen that unlike large funds such as a16z, Animoca Brands likes to participate in projects at an earlier stage.


Both NFT and Chain Games represent the future, but when it will really break out or become the infrastructure of the Internet society, in fact, everyone is still uncertain. But the founder expressed a desire to be the one driving the process together, so that’s why Animoca has been investing in great projects, including investing in or acquiring several seasoned web2 game studios. These studios are now building blockchain versions of their relatively successful web2 games. These developers may finally be able to bring players a truly interesting blockchain gaming experience.

Regarding the question of whether the Play to Earn model will accelerate the bursting of the NFT game bubble, his opinion is: The value that NFT games can bring to the industry and users has many levels, among which “earning while playing” is just a label. Play can also own and trade, not necessarily earn. There are many layers to value, not just making money. P2E is also just a label, and it may be a good way to attract players quickly, but if the game design only makes a fuss about this point and has no other advantages, or cannot balance with other advantages, it will quickly fall into silence.

And said: Animoca will strengthen the interaction with users and increase investment in market education. In addition, in order to maximize the user experience, the games on REVV Motorsport will be deployed on Polygon recently to reduce costs and increase speed. Under this dual role, the games they develop and launch may play a positive role in the education market.

The fact that digital ownership and earning while playing will change the way we live and work is really happening, and these trends are on display in the face of the COVID-19 pandemic. In the Philippines, some have boosted their income by playing the blockchain game Axie Infinity, which happens to be one of the games that Animoca has invested in.

Animoca Brands is one of the first major gaming companies committed to elevating digital ownership and earning while you play to the accepted standard of video gaming.

In June of this year, Siu also said that “ Despite the current market concerns, we remain calm and optimistic about the future… Current market conditions will not kill Web3, the Metaverse, NFTs or cryptocurrencies. There will be bumps, cyclicality on the road. Change and the occasional black swan event, but the map of the future is clear for anyone with a broader and longer-term vision.”



When faced with ASX pressure to adopt a cautious attitude towards digital assets, Animoca withdrew from ASX to choose cryptocurrency; when faced with the controversial “play and earn” model and the use of in-game currency faced regulation, Animoca chose to optimize the model and improve the market Mitigation; Animoca chooses All in to embrace decentralization when faced with the economics of an open metaverse or a collection of interchangeable virtual worlds being detrimental to centralized game companies.

Perhaps, it is Animoca Brands’ decisiveness, enthusiasm, and selflessness that have brought him the status and achievements in the industry today. How to transform into a new industry, perhaps Animoca Brands provides us with a good example.

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