Led by Soros and Sequoia for $360 million What did Animoca do right?
Led by Soros and Sequoia for $360 million What did Animoca do right?
From 2021 to 2022, the NFT and meta-universe craze can be described as one wave after another, with the blockchain sandbox game The Sandbox just surpassing 2 million registered users.
Meta-universe game Decentraland to host first Meta-Universe Fashion Week; Dapper Labs shortlisted as one of the world's most innovative companies in 2022 ......
The strength of each company is comparable, but in fact the biggest winner in this race may be none other than Animoca Brands, which, in addition to the above-mentioned star projects, has now invested in over 150 NFT or metaverse-related projects.
On January 19th, 2022, Animoca Brands closed a new round of financing for up to $359 million led by Liberty City Ventures.
Other participating investors include Red Shirt China, Soros Fund Management, Gemini Frontier Fund, Winklevoss Capital and 10T Holdings.
According to sources, the investment is openly identified by as many as 19 participating institutions and also some undisclosed investors, not only thatThe funding round more than doubled Animoca Brands' valuation to more than $5 billion.
Reviewing Animoca Brands' growth path over the past two years, its company is valued at approximately $100 million in 2020; after two rounds of investment in 2021, it is valued at $1 billion.
In October of the same year, the valuation reached $2.2 billion, to the current $5 billion, and gradually became a unicorn company in the NFT track, how exactly did Animoca Brands do it? How did Animoca Brands manage to become a unicorn on the NFT track? And what made it so popular with many investment institutions?
Who is Animoca Brands?
Animoca Brands is actually a spin-off subsidiary from Animoca, a chain game development and investment company founded in 2014 by Yat Siu, a renowned Hong Kong tech entrepreneur based in Hong Kong.
Born in Vienna, Austria, Xiao Yi has had a strong interest in code and programming since he was a teenager, and with a musical family environment, he is even better at making music with computer software.
Because his father was from Hong Kong, Xiao Yi returned to Hong Kong around the age of 18 and has since launched his entrepreneurial career.
In 2009, Xiao Yi sold Outblaze, the web service company he founded, to IBM. The mobile Internet that was emerging at that time attracted Xiao Yi's attention and he started to research APPs and create games.
It can be said that this year was a watershed in Xiao Yi's entrepreneurial and investment career, and also planted the seeds for later focusing on the blockchain field and the game field..
Animoca Brands is not only the developer of metaverse headline project The Sandbox and NFT racing game F1 Delta Time, but also an early investor in star projects such as Dapper Labs and Decentraland.
Animoca Brands also has the rights to develop and represent Doraemon, Cherry Blossom, Marvel and other big IP manga hand games.
In 2012, Animoca was still a mobile game company with traditional handheld game development as its core business, and one of the largest mobile game companies in Asia.
At the time, Animoca had over 40 million installs, while annual revenues amounted to $20 million. However, because Apple didn't like the way Animoca cross-promoted the company's apps, it canceled Animoca's platform.
In 2015, Animoca Brands listed on the Australian Securities Exchange (ASX), but has been underperforming, even expanding into e-books.
At the fourth quarter of 2017, Animoca Brands had been experiencing negative quarterly cash flow, theUnder these circumstances, the company had to make a series of internal adjustments to salaries, personnel, assets, etc. to streamline costs and increase revenue..
And the turnaround for Animoca Brands came in late 2017, when Animoca Brands was acquiring a studio called Fuel Powered, with which Axiom Zen, which was developing CryptoKitties, shared an office.
Founder Yat Siu took a great interest in this blockchain game CryptoKitties, which was launched in November 2017 and quickly ignited the market.
In early 2018, Animoca entered into a renewable exclusive licensing and distribution agreement with Axiom Zen for one year to distribute "CryptoKitties".
"This was our first involvement with blockchain gaming and NFT, and we immediately realized the power and benefits in between, and how NFT would revolutionize the existing gaming industry by providing digital property rights to players", says Yat Siu, and that's when Animoca Brands started to focus on blockchain games and NFT.
However, because Animoca Brands was involved in the Crypto field, there were some "trading irregularities" and had to choose to delist the company after continuous inquiries from the ASX, but it is also because of the delisting that Animoca Brands has more room to play in the blockchain field.
How Animoca Brands is having a second wind
The opportunity is not lacking for many people, what is lacking is the ability to seize it. when Animoca acquired Fuel Powered, it was exposed to CryptoKitties, the first game in the blockchain, and it was as if the opportunity was tailor-made for Animoca.
For Animoca Brands, which was already making games, it was a no-brainer to understand how Crypto and NFT would change gaming and what new prosperity they would bring to the industry.
As a result, Animoca was quick to pick up the exclusive licensing and distribution rights for Crypto Kitties and got a first-hand taste of what blockchain technology-based games can bring to the table.
Then, Animoca started its exploration in the blockchain industry and began to cast its net everywhere in the blockchain game field in order to capture the future development dividends in this direction.
Although at that time, the blockchain game has not been outstanding and there are not yet some consumer-grade applications, for most people in the blockchain industry, the blockchain game belongs to a promising future, but there is no clear idea of how to develop it, and there are still many unknowns.
However, Animoca Brands, with its own professional advantages, has started to make investments and layouts in the blockchain game field continuously in 2018 according to its own understanding, with many projects invested and acquired, not many projects really seem to be able to finally excel.
But Animoca Brands has also pinpointed most of the quality projects in the blockchain gaming space and taken them down solidly.
In August 2018, Animoca acquired Pixowl, the developer of The Sandbox, a sandbox handheld game with 1 million monthly active users, for $4.875 million, and Pixowl was planning to launch its blockchain version at the time, giving rise to the blockchain version of The Sandbox that many celebrity names are now dabbling in.
Players can buy land on The Sandbox and can build the game they want on their own land, kind of like a blockchain version of My World.
In October 2018, Animoca invested in Decentraland's seed round for $500,000.
Decentraland is a virtual world that wants to create a "Matrix" based on blockchain and VR technology. Users can build their own virtual properties by constructing the buildings they want on it.
Both have a similar virtual land + build logic, and with March 2021, a program calledRobloxs first successful IPO in the US with the concept of meta-universe, we look back and understand that Decentraland and The Sandbox are both part of the meta-universe in the blockchain.
And in October 2021, Facebook, the world's largest social platform, announced its full-scale entry into the meta-universe and changed its name to Meta, and since then, the meta-universe concept has really caught the world's attention.
With its previous partnership with Dapper Labs, the team behind CryptoKitties, Animoca subsequently participated in multiple rounds of funding from Dapper Labs in November 2018 for $12 million, September 2019 for $11.2 million, and August 2020 for $11.4 million, respectively.
And Dapper Labs is also the team that has done wonders in the blockchain gaming space many times, after Animoca's investmentDapper Labs has successively launched the only high-performance blockchain for consumer-grade applicationsFlow Network, and the NBA Top Shot, an NBA digital collectibles project launched in cooperation with the NBA official.
Among them, NBA Top Shot has exceeded one million users in a very short period of time and monthly revenue has exceeded 100 million dollars because of its ability to quickly convert players of traditional star cards into users.
The rapid success of NBA Top Shot directly led the Dapper Labs team to secure over $500 million in funding in just 6 months, and Animoca Brands is once again catching the fast train.
On the other hand, with NFT adoption starting to take off a bit in 2019, Animoca Brands has been quick to follow the buzz, investing in the largest NFT trading marketplace in November 2019OpenSea.
In just the past two years, the market volume of NFT has grown from just over $100 million to a huge market of tens of billions of dollars, and OpenSea has transformed from a niche marketplace to the leading exchange in NFT, Animoca Brands has once again entered the game on the eve of the NFT explosion, and the timing is spot on.
So when we look back at the de-listing of Animoca Brands from the ASX, instead of running away from a mainstream theme, they found the next holy grail and chose to bet on it, and that's how we see Animoca Brands having their "second spring".
Why is Animoca Brands betting on blockchain?
As we said above, although Animoca Brands completed most of the company's biggest dream IPOs back in 2015, the flat-as-a-water performance was truly embarrassing, and the participation in the mainland launch of CryptoKitties (aka Obsessed Cat, CryptoCat) at the end of 2017 seemed to be the arrival of a turning point in history.
But what really made Animoca Brands make up their mind to transition to blockchain and metaverse are also some market and their own role shifts, which we discuss below.
NFT, chain tours see explosion
In our previous annual report, we have counted that the total value of the NFT market jumped from $41 million in 2018 to $23 billion in 2021, and even this growth trend has not stopped by this year, exceeding $20 billion in transactions before the end of the first quarter of 2022, seemingly surpassing the market size of the past year with the first 3 months.
And as we'll see in Animoca Brands' layout, 2018 was an important year for its transformation, the year they acquired The Sandbox development company Pixowl, which is preparing to transform its blockchain game, for $4.875 million.
In the same year, Animoca Brands invested in Decentraland and Dapper Labs, although at the time these investments or acquisitions did not bring much revenue and were even in the loss-making stage.
But Yat Siu, co-founder of Animoca Brands, had his eye on the track, so he stepped in again at the end of 2019 to lead a $1.465 million round from AxieInfinity developer Sky Mavis for $420,000.
The subsequent story, as we have described in detail above, is thatWith the explosion of the NFT market and blockchain game market, the companies he bet on have become the best in the industry, and Yat Siu is undoubtedly a "gold-digger" in terms of direction..
Of course, without the breakout of the NFT market, or withoutAxie InfinityLeading blockchain games into a Play-to-Earn model, we won't see the rise of Animoca Brands.
Taking a step back, they are both the promoters and the beneficiaries of the times.
Become a blockchain investment house
When we look back at the development of the blockchain industry over the past few years, we always find stories of investment companies that have grown from nothing to "investment giants".
Whether it is Paradigm, which has been famous for a long time, or VCHashed, the number one crypto in Korea, which has recently expanded from $700,000 to $4 billion, the protagonists of the story seem to have become the "King of Bulls" in Crypto.
Now, we see that Animoca Brands is receiving "Old Money" from traditional mainstream investment institutions on the one hand, and putting this "Old Money" into the blockchain field on the other. According to the official website of Animoca Brands, it has invested in more than 150 projects so far.
Meanwhile, Animoca Brands grew its investment and digital asset revenue to approximately $529.6 million in the first three quarters of 2021, holding more than $600 million in liquid digital assets, according to a company investment figure released late last year by Animoca Brands co-founder Yat Siu.
So, as we can see, after being exposed to CryptoKitties in 2018 and tasting the sweetness of multiple successful investments since thenAnimoca Brands has gradually transformed itself from a game development company to an investment company..
It also completed the transition from "Party B" to "Party A", except that his LPs (the group of funding sources) are other traditional giants.
Perhaps Animoca Brands is more comfortable with investment than with game development, after all, the former is over the hill, the latter is smooth, and if this is the choice before the founding team, I think the smart ones will make a wise choice.
And Yat Siu has only made the choice that is in the interest of the majority, even if it is forced to delist, but now that we look at it, does it still matter to YatSiu to go public? Maybe it's not the only direction anymore.
The founding team sees further into the future: the meta-universe
In an interview back last year, Yat Siu, co-founder and chairman of Animoca Brands, said, "For me, this is the great promise of an open metaverse, that is, a way of life where we can build exactly the same as in the physical world in terms of innovation, creativity and the creation of new things. Because I happen to own 'these', their ownership is secure and verified."
We can get a glimpse of Animoca Brands targeting not only NFT or blockchain, but also the meta-universe led by Web3.
In the face of this magnificent story, theAnimoca Brands saw both the opportunity and the step-by-step approach to that "metaverse".
And in a recent interview, Yat Siu reiterated his view of the ideal metaverse, saying, "If, in the end, most of us decide to live in a closed metaverse or a completely closed ecosystem, then in effect our lives are meant to follow their rules.
And it's going to be harder for us to break out of that because they're going to end up manipulating and controlling that network effect, like we see in some of the big tech companies today."
Perhaps that's why Animoca Brands has invested in so many multiverse-related companies, becauseNFT is the new asset structure in the Web3 framework, "earn while you play" is the state of the game in the Web3 state, and decentralized finance is the underlying foundation of the meta-universe.
Of course, we can say that it was the current achievements that gave Yat Siu the idea for the meta-universe, but all stories do not begin with "butterflies stirring their wings".
It's just that YatSiu has given more meaning to the current development of Animoca Brands, which is both the pulse of the times and the aspiration of the crowd.
Can the success of Animoca Brands be replicated?
As we look back at Animoca Brands' journey from game development team to IPO and then delisting All in into the blockchain industry along the way, we as researchers ask the question: can Animoca Brands' success be replicated?
First of all, Animoca Brands brings us the biggest inspiration is that even if you are a public company, you can't stop exploringEspecially in this extremely fast-changing world, if we just take the company listing as the end of the enterprise, perhaps it will eventually fall into the joke of the listed companies, especially when we go to see the bottom of the listed companies like now, the share price all the way downhill, the stockholders all the way grieving, shareholders have been reducing their holdings.
On the contrary, Animoca Brands' founders stepped up decisively when the team hit a growth bottleneck and chose to open up new growth paths, which led to the discovery of NFT, the discovery of Play-to-Earn, and the path to building the meta-universe and Web3.
So, in this sense, any company can replicate this spirit ofBut back to Animoca Brands itself, if we want to recreate "Animoca Brands", perhaps we need the flood of the times in addition to the openness of mind..
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