Hong Kong-based Animoca Brands, a developer of blockchain gaming technology, has reportedly cut its target for its metaverse fund by a further 20% to $800 million, Reuters reported citing sources familiar with the matter.
The blockchain gaming technology company reportedly scaled back on its billion-dollar goal due to volatility in the crypto sector. The company had previously announced in November 2022 that it was working on a new Animoca Capital fund with a target of $2 billion but then halved that target to $1 billion in January 2023.
In recent developments, people familiar with the matter shared that the company had once again reduced its target by another 20% to $800 million. Reuters shared that its sources preferred not to be named as they had not been authorized to speak to the media.
Two sources reportedly disclosed to Reuters that Animoca’s market capitalization, which was previously valued at roughly $6 billion following a Temasek-led financing round in July 2022, has fallen to below $2 billion, with its shares trading at a considerably lower valuation in secondary markets.
The decreased fundraising target and declining valuation signal a change in sentiment on the crypto industry, as excitement around such technologies has dwindled following scandals ranging from the collapse of FTX to the bankruptcy of several crypto lenders.
In 2022, Animoca Brand was named the most funded metaverse developer, according to a report by Nasdaq. The report revealed that Animoca had the most metaverse deals in 2022, closing 15 deals and receiving over $564 million in funding.
Animoca, as a prominent player in the metaverse industry, holds a majority stake in one of the leading metaverse platforms called The Sandbox. Apart from this investment, the company has actively participated in developing nonfungible tokens (NFTs) and GameFi. According to Yat Siu, one of Animoca’s co-founders, GameFi is expected to become one of the main gateways for the general public to access the metaverse.