Animoca Brands, a prominent player in the gaming and metaverse sectors, is contemplating a return to the public market after a four-year hiatus. The company, which delisted from the Australian Securities Exchange (ASX) in March 2020, is now eyeing more favorable jurisdictions such as Hong Kong and the Middle East. This strategic move comes as Animoca seeks to capitalize on regions with more receptive regulatory environments for its crypto and blockchain-focused operations.

According to a report by The Information on June 26, Animoca’s co-founder, Yat Siu, confirmed that the company has been engaging with investment banks to discuss potential public offerings. However, the company has yet to finalize a location or appoint an adviser. Headquartered in Hong Kong, Animoca operates offices and subsidiaries worldwide, positioning it well for a global public market comeback.

Challenges with ASX

The delisting from the ASX in 2020 was prompted by the exchange’s concerns regarding Animoca’s compliance with listing rules, particularly those related to its investments in crypto and blockchain businesses. At the time, these investments were viewed as inconsistent with the ASX’s financial and asset regulations, leading to Animoca’s removal from the exchange. This regulatory friction highlights the challenges faced by companies operating at the intersection of traditional finance and emerging digital assets.

Innovative Financing Efforts

In addition to its public market ambitions, Animoca is exploring innovative financing options. Earlier this month, the company entered into a unique arrangement with Galaxy Digital, using a 1708 Stradivarius violin as collateral for a multimillion-dollar loan. The violin, once owned by Russian Empress Catherine the Great, was tokenized into a non-fungible token (NFT) by Galaxy Digital. Both the NFT and the physical violin will remain with Galaxy until the loan is repaid. This creative financing solution underscores Animoca’s commitment to leveraging blockchain technology in diverse and novel ways.

Valuation Fluctuations

Animoca Brands has experienced a rollercoaster in valuation over the past few years. The company's valuation soared to nearly $6 billion by January 2022, driven by the booming crypto and gaming markets. During this period, Animoca made significant investments in various Web3 firms and expanded its portfolio to include a range of businesses from gaming companies to digital marketing agencies.

However, the broader industry challenges in 2023, including the collapse of FTX and the bankruptcy of several crypto lenders, led to a significant downturn in Animoca’s valuation. The company's market value reportedly fell to below $2 billion, reflecting the volatile nature of the crypto and blockchain sectors. This downturn also forced Animoca to scale back its fundraising targets for a metaverse fund from $2 billion to $800 million.

Future Outlook

Despite these challenges, Animoca Brands remains optimistic about its future. The company’s potential return to the public market signals a renewed commitment to growth and innovation. By targeting jurisdictions with favorable regulatory landscapes, Animoca aims to navigate the complexities of the crypto and blockchain industries more effectively.

As Animoca continues to explore new financing avenues and strategic partnerships, its journey underscores the dynamic and rapidly evolving nature of the digital asset space. Investors and industry observers will be closely watching how Animoca navigates these opportunities and challenges in the coming years, potentially setting new precedents for companies operating at the cutting edge of technology and finance.