Hong Kong-based blockchain video gaming firm Animoca Brands has seen its private market valuation shrink by more than half, as volatility persists in the cryptocurrency sector after an industry meltdown two years ago.
Shares of Animoca Brands, a private company, are being traded on secondary markets at valuations that vary between US$1.5 billion to US$3 billion, co-founder and chairman Yat Siu told the Post.
The company, known for its investment into hundreds of blockchain start-ups and its own metaverse platform, The Sandbox, where people can buy virtual plots of land as non-fungible tokens (NFTs), was valued at US$5.9 billion during a fundraising round completed in July 2022.
The latest figures, first reported by cryptocurrency-focused outlet DL News last week, mean that Animoca’s shares are changing hands at times for a quarter of what the company was worth two years ago.
But such trades do not reliably reflect the company’s valuation, as there is “seldom substantial liquidity” in over-the-counter secondary markets, Siu said.
“Currently the company is unlisted, meaning our shares are not traded on an exchange but only traded on secondary markets across multiple locations, agents, and brokers, with relatively little volume and reporting,” Siu said. “This makes it challenging to track reliable information about our valuation.”
Broader crypto market conditions, including recent volatility and the plunge last week, also contributed to the low valuation, according to Siu.
He added that the company’s valuation would be more accurately reflected if it were publicly listed.
Founded in 2014, Animoca Brands has become one of the biggest investors in the Web3 ecosystem and one of Hong Kong’s best-known technology unicorns – private companies with a valuation of at least US$1 billion.
The company’s fortunes have risen and fallen with swings in the cryptocurrency market, which this year has given it a boost as the price of bitcoin surged to an all-time high above US$73,000 in March. Even after the price plummeted this month, bitcoin, a bellwether for the broader crypto industry, remains up by more than 30 per cent for the year.
Animoca’s bookings in the first three months of 2024 jumped 72 per cent to US$90 million, up from US$52 million in the same period last year. Its cash and stablecoin balance also increased to US$291 million at the end of March, according to the firm’s unaudited financial statement. It has reversed the momentum from last year, when bookings fell 30 per cent year on year to US$280 million and its cash and stablecoin balance declined by nearly 10 per cent to US$175 million.
Siu is now thinking about a possible public listing for Animoca, which could come as early as next year, he said in June. Possible locations include its home city of Hong Kong or in the Middle East, where Dubai has become a major crypto hub.
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