Animoca Brands’ Latest Financial Update Shows Assets Worth at Least $2.7 Billion

According to its latest unaudited financial disclosures, Animoca Brands has reported $558 million in digital assets on its balance sheet.

An In-depth Look at Animoca Brands' Financial Solidity

Over the past few months, the company has significantly bolstered its digital asset holdings, acquiring an additional $266 million through various investments and token launches.

Moreover, a recent official announcement revealed that Animoca Brands has seen a substantial increase in its cash and stablecoin balance, now totalling $291 million—an increase of $100 million since December 2022.

This growth indicates a 16% rise in total digital assets, reaching $558 million from $469 million recorded in December 2022.

Animoca Brands' Chairman Yat Siu expressed his pleasure on X (previously known as Twitter).

Beyond its balance sheet, Animoca Brands' Web3 subsidiaries maintain substantial token reserves, estimated at around $1.8 billion.

This includes approximately $1.3 billion in highly liquid tokens and $542 million in assets with lower liquidity.

Notably, these figures do not yet include the valuation of Animoca Brands' approximately 400 minority investments in various Web3 companies, such as Illuvium, Pixelmon, Xterio, Gunzilla, Planetarium, Studio 369, Skrice Studios, Mystic Moose, and Wilder World.

With ongoing valuation processes, these investments could further augment Animoca Brands' financial standing.

Amidst market volatility, Animoca Brands adjusted the target of its metaverse fund, "Animoca Capital," reducing it by 20% to $800 million from an initial target of $2 billion.

This decision followed a previous reduction to $1 billion, resulting in a 60% decrease from the fund's original target.

Despite these adjustments, Animoca Brands remains optimistic about its future performance, especially with promising market indicators in 2024.

The company states:

"Having continued to build and expand through the difficult cryptocurrency market of 2023, the company is now well placed to capitalise on the market rebound evident over the last few months; in particular, the company notes that Bitcoin recently reached a series of all-time high valuations and the web3 gaming sector overall has strengthened considerably."

As the company finalises its audits for 2021 and prepares for a key unaudited update for 2023 in Q2 2024, stakeholders anticipate further insights into Animoca Brands' financial health and strategic direction.

Diverse Investment Portfolio

Animoca Brands stands out as a leading investor in Web3, boasting a robust portfolio of over 400 investments in the sector.

These investments, made directly and through Animoca Ventures, include prominent names such as Yuga Labs, Axie Infinity, Polygon, Consensys, Magic Eden, Fireblocks, OpenSea, Dapper Labs, Yield Guild Games, and numerous others.

Source: Animoca Brands

Yat Siu's Thought on FTX's Collapse & Impact on Portfolio

Yat Siu had pointed out in a statement that Animoca Brands' exposure to FTX is minimal, consisting of a non-material trading balance:

"Our exposure to FTX is limited to a non-material trading balance and we continue to invest and support the ecosystem."

He emphasized the company's financial robustness, citing a cash balance of around $214 million, digital assets valued at up to $940 million, and an additional $3 billion in off-balance sheet digital reserves.

In November 2022, Animoca Brands had announced its plans for a new Animoca Capital fund, initially aiming for $2 billion.

However, the company revised this target in January 2023 to $1 billion.

More recently, two individuals familiar with the matter disclosed that Animoca further reduced its target by 20%, aiming for $800 million.

This adjustment in fundraising goals and valuation mirrors shifting sentiments within the crypto industry, in particular, the fall of FTX and the bankruptcy of several crypto lenders.

He had expressed in a letter his thoughts on bad actors:

"It is fair to say that many of us, myself included, are very upset by the events of the last several days. I am not particularly upset at the drop in token prices; in fact recent developments would suggest more resilience in the market as compared to five months ago and we view them simply as moments in history especially when you consider what our industry looked like five years ago. No, I am upset that the important work on making the web decentralised, free from central power structures that continue to abuse their disproportionate power, is once again being overshadowed by a very few irresponsible actors. Very few."

In addition to the overall market downturn, he revealed that approximately a dozen of Animoca's portfolio companies bore the impact of the collapse.

Among them is the starship game Star Atlas, whose treasury predominantly resided on FTX.

Yat Siu reflected on the significance of Sam Bankman-Fried's (SBF) conviction, stating that it signals the resolution of a troubling period in the cryptocurrency sector:

"This brings final closure to a very dark chapter in our industry, and also it makes it very clear that [Bankman-Fried] ultimately was simply a fraud."

According to him, the case involving SBF was a longstanding concern, distinct from the fundamental nature of cryptocurrencies and blockchain technology.

He further observed that the conviction represents the industry's progression beyond previous unforeseen crises, such as the insolvency of Three Arrows Capital (3AC) and the collapse of Terra-Luna in May 2022, which resulted in substantial financial losses.

Yat Siu added:

"For us as an industry, I think we're cheering it on and we're really glad that we can hopefully not talk too much about [Bankman-Fried] in the future."