Animoca denies reports of $200M cut to Metaverse fund and valuation drop to $2B

Venture capital firm and Web3 game developer Animoca Brands has refuted claims that it scaled back its Metaverse fund target by $200 million, or 20% to $800 million amid volatility in the crypto market and instability in the banking sector.

The firm also down-played suggestions that its valuation has plummeted from $6 billion as of July 2022 to roughly $2 billion in March 2023.

Stemming from a March 24 Reuters report that cited anonymous “people familiar with the matter,” it was claimed that Animoca initially halved its $2 billion Metaverse fund target in January, and then recently followed that up by cutting it down another 20% to $800 million.

The fund in question was announced in November, with the goal of allocating capital to mid to late-stage startups with a Metaverse focus. At the time, Animoca co-founder and chairman Yat Siu outlined that the fund target was between $1 billion to $2 billion, depending on how much capital was raised.

In a public statement shared with Cointelegraph, Animoca stated that “the claim that the Animoca Capital fund target was ‘cut’ from $2 billion to $1 billion is not correct, because $1 billion has always been within the range declared.”

The firm did acknowledge that the banking collapses in the U.S. have of course had an impact, but stressed that the final amount raised for the fund has yet to be determined.

“There’s no doubt that the FTX and banking crises have had a serious impact on available venture capital, but fundraising for the Animoca Capital fund is in progress. When the raise is concluded we will inform the market with the appropriate details, including the final size of this fund,” the firm stated.

Commenting on the leaked information, Siu told Cointelegraph that given the information came from unnamed sources, it “makes it difficult to ascertain exactly who or what the sources and agenda are, which is unfortunate.”

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Concerning the company’s valuation, Animoca asserted that the figures reported by Reuters and the “two other” unnamed people cited were inaccurate.

Animoca’s shares (AB1) were initially listed on the Australian Stock Exchange (ASX) in the firm’s early days. However, AB1 was delisted back in March 2020 due the ASX’s assertions that Animoca had breached its listing rules by being involved in crypto-related activities, among other things.

Since then, its shares have traded on unlisted stock-focused exchanges such as the Sydney-based PrimaryMarkets.

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The data from this platform was used to calculate a total market cap of AB1 at around roughly $2 billion. However, Animoca argues that these figures don’t paint the full picture of the company’s total valuation.

“The claim […] that Animoca Brands ‘now trades its shares on PrimaryMarkets’ is not technically correct. We terminated our arrangement with PrimaryMarkets in the second half of 2020, but PrimaryMarkets chose to continue to trade Animoca Brands shares on its platform,” the firm stated, adding that:

“We do not consider the thin trading activity on PrimaryMarkets to accurately reflect the company’s value. Trading volume is far too low to provide the price accuracy you would find on an actual primary market.”