Animoca Brands slashes anticipated Web3 fund to $1 billion: report

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Virtual currency venture capitalist firm Animoca Brands has announced that it will be keen on raising $1 billion for its Web3 fund, says a Bloomberg report.

The fund, dubbed Animoca Capital, has been touted to provide support for creators and builders in the Web3 industry with a special focus on decentralized finance (DeFi), the metaverse, and non-fungible tokens (NFTs). However, the amount raised is a far cry from the announcement in 2022 in which Animoca Brands noted that it planned on raising up to $3 billion.

Animoca Brands’ declining figures have been attributed to the dire conditions faced by the digital asset market over the last few months. Yat Siu, the co-founder of the firm, told Bloomberg that “it is fair to say that it’s a challenging market,” marked by more lows than highs for investors.

“Because our revenues are based on tokens, the overall revenue in fiat terms will also be affected,” said Siu. 

Animoca Brands has emerged as one of the biggest players in the industry, with investments in over 300 startups. Despite the rapidly declining asset values, Animoca Brands’ subsidiaries have gone on to raise capital, banking on the remaining institutional interest in virtual currencies.

Animoca Brands’ financial position has raised eyebrows following the firm’s failure to file its annual accounts for 2020, which the company says it received permission to delay the filing. However, there remain the gnawing issues like the delisting of the company by the Australian Securities Exchange, payment of fines to regulators for late filing, and the laying off of top auditor Grant Thornton.

The outlook for 2023

Pundits are already predicting a slow year for digital assets, given the grim nature of macroeconomic conditions and the failures experienced by large VC firms in the sector. Aside from the macroeconomic conditions, analysts are pointing to the avalanche of incoming regulations as proof as institutional investors opt for the sidelines to gain a clearer picture before sinking funds.

However, it is expected that builders working on innovative use cases for blockchain technology can expect an inflow of funds from investors, given the historical antecedents of extended bear markets.

“Thus, we expect the development and deployment of blockchain technology to accelerate in the next 12 months as one of many investments businesses make to increase efficiency,” a paper from Franklin Templeton read.

Across the board, NFTs have been predicted to receive the lowest interest for VC funds, while the metaverse appears to have piqued the interest of both retail and institutional investors.

Watch: Blockchain Venture Investments: Driving Utility for a Better World