HK gaming giant Animoca halves Web3 fund target to $1b: Report

Hong Kong’s Animoca Brands, a gaming software firm and Web 3.0 investment powerhouse, has halved the target for its new fund eyeing mid- to late-stage metaverse firms to $1 billion, co-founder and Executive Chairman Yat Siu told Bloomberg in an interview. 

Just two months ago, Siu had told Nikkei Asia in an interview that it was targeting to raise up to $2 billion for the new fund despite the industry being blown by a series of meltdowns in 2022 — from hedge fund Three Arrows Capital (3AC) and lender Celsius Network to stablecoin Terra, crypto exchange FTX, crypto lender Blockfi, and more. 

Siu told Bloomberg that 12 firms under Animoca’s portfolio have been hit hard by the FTX saga, including NFT spaceship seller Star Atlas. 

“What we have to understand about FTX is that it is outright fraud. This is not an honest mistake, as maybe [Sam Bankman-Fried] would have us believe. This was not a confused kid who didn’t know what he was doing. This was an absolute fraud. He took customer deposits and basically gambled them away at Alameda. Any industry that has this level of fraud will get rocked,” Siu told Dealstreetasia in an earlier interview.

The global crypto market value has tumbled by two-thirds from its peak level of almost $3 trillion in November 2021 to below $1 trillion as of December 21 2022, while Bitcoin price also hit its multi-year low at below $15,782 in the same month, according to data from Coinmarketcap.

The crypto bear market in 2022 was unlike any other as the previous cycles did not face global macroeconomic uncertainties. “Consistent interest rate hikes and quantitative tightening in 2022 granted us a devastating hangover. Fortune did not favour the brave, and we entered a consistent doom cycle of default, fraud, and contagion. A financial crisis with seemingly no end that still ravages our industry,” commented Vetle Lunde, senior analyst at Arcane Research at the firm’s latest year in review report.

“In 2022, the naked swimmers were exposed and bad apples got eliminated. This is promising through long-term lenses, while ever so painful in the short term,” he added.