The Sandbox developer Animoca Brands sees private valuation surge to US$5 billion amid metaverse, NFT frenzy
- Animoca Brands said on Tuesday it had completed a fundraising for US$358.89 million
- Investors are betting firms like Animoca Brands can disrupt incumbent video games business model by combining NFTs and the metaverse
Hong Kong-based blockchain gaming company Animoca Brands, best known for championing non-fungible tokens (NFTs) in video games, saw its valuation soar to US$5 billion on Tuesday as investors continue to bet on the potential of NFTs and the metaverse.
Animoca Brands said on Tuesday it had completed a fundraising for US$358.89 million, giving it a private valuation of US$5 billion. Animoca Brands has garnered increasing interest with its popular, open-world game The Sandbox, and its valuation is now up five-fold since the company reached unicorn status last May.
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The successful fundraising by Animoca Brands indicates the strong investor appetite for two of the tech sector’s biggest current buzzwords: NFTs and the metaverse. It also comes after blockchain game Axie Infinity, in which Animoca Brands is an investor, saw its valuation skyrocket to US$3 billion last October.
NFTs refer to units of data stored on a blockchain, which guarantees each digital asset to be unique and immutable. As such, NFTs can be owned and traded much like physical items in the real world. Companies like Animoca Brands now allow gamers to own and trade video game items in the form of NFTs on the blockchain.
The metaverse meanwhile, typically refers to a shared, immersive 3D virtual space where people can interact and trade their assets, and is seen by many as the next iteration of the internet. Some analysts expect companies like Animoca Brands to disrupt the incumbent video games business model by combining these two emerging trends.
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Founded by Hong Kong-based businessman Yat Siu, Animoca Brands was previously listed on the Australian Stock Exchange but decided to delist in 2020 as it made a pivot towards cryptocurrencies and blockchain gaming.
The Sandbox, a game which is still in its “alpha test” stage, has received widespread attention among the crypto and investment community after pledging to become an open metaverse for its users. Last November, one virtual plot in The Sandbox was sold in the form of an NFT for a record US$4.3 million.
Adrian Cheng Chi-kong, the third-generation scion of Cheng Yu-tung who founded Hong Kong conglomerate New World Development, personally invested in The Sandbox.
Animoca Brands said that the new capital raised will be used to continue funding strategic acquisitions and investments, product development and licences for popular intellectual properties.
Yat Siu has said that Animoca Brands wants to build “an open metaverse”, in contrast with the tightly regulated and closely guarded ecosystems that exist on many current big internet platforms.
“In 2021, we saw tremendous growth in this space and Animoca Brands has been one of the leaders at the forefront of these developments in the industry,” said Yat Siu in the statement. “We believe we are still at the initial stages of a new internet revolution, and there are tremendous opportunities ahead of us in 2022 and beyond.”
The company voluntarily released an unaudited financial report last month in which it said it had received about US$140 million in bookings between January and September 2021, marking a record 9 months for the company.
