Shalini Nagarajan

Saudi Arabia&#8217;s NEOM initiative has proposed a $50 million investment in the Web3 gaming and investment company Animoca Brands.



NEOM&#8217;s investment division has teamed up with Animoca to further Web3 projects in alignment with Saudi Arabia&#8217;s Vision 2030 strategy.&nbsp;



According to an <a href="https://www.animocabrands.com/animoca-brands-and-neom-announce-strategic-partnership-and-investment">announcement</a> on Tuesday, half of the $50 million investment will come through convertible notes with a capped conversion price of $4.50 AUS per share, while the other half will be used to acquire Animoca shares from the secondary market.



Animoca’s share price is likely listed in Australian dollars as the firm was once listed on the Australian Securities Exchange (ASX). It was <a href="https://www.animocabrands.com/removal-from-official-list">delisted</a> from the ASX in 2020 due to non-compliance issues, yet it still trades on the secondary market.



The finalization of the financing agreement for the convertible notes is contingent on agreed conditions being met.



Read more: <a href="https://blockworks.co/news/web3-gaming-blockchain-security-blockaid">Crypto funding: Web3 gaming, blockchain security in focus</a>



Animoca Brands will collaborate with NEOM to develop <a href="https://blockworks.co/tag/web3">Web3</a> business services for global use, focusing on technological growth in the Saudi capital Riyadh and the NEOM area.&nbsp;



An Animoca Brands spokesperson did not reveal specific information regarding the projects they intend to undertake with the NEOM ecosystem, stating that the initiatives are still in the planning phase.



NEOM is an ambitious initiative launched by Saudi Arabia, and is designed to be a new-model international city and economic zone situated in the northwestern part of the country.&nbsp;



The project’s vision is for the city to be a hub for innovation, technology and sustainable development, seeking to diversify the Saudi economy away from its traditional reliance on oil.



Investing in Web3 initiatives would align with NEOM&#8217;s vision of being at the forefront of technological innovation.



Read more: <a href="https://blockworks.co/news/busan-urban-blockchain-digital-asset-exchange-south-korea">Busan to build urban blockchain and digital asset exchange</a>



“We are honored and excited to partner with and receive investment from NEOM, one of the world’s most ambitious projects seeking to use innovation and technology to redefine how we live, work, and play,” Yat Siu, Animoca’s executive chairman, said in a statement.



“We have always referred to the growth of the Web3 ecosystem as the emergence of a new meta-nation, and now NEOM could well become the first region to fully harness the power of blockchain,” Siu added.



Saudi Arabia has earlier <a href="https://blockworks.co/news/saudi-arabia-fund-crypto-blockchain-vcs">disclosed</a> investments in about 40 US venture capital firms, many of which are involved in crypto, blockchain and Web3 ventures.&nbsp;



Sanabil, associated with Saudi&#8217;s sovereign wealth entity, annually allocates about $2 billion to support businesses with innovative models. 



This fund has stakes in firms such as Andreessen Horowitz (<a href="https://blockworks.co/tag/a16z">a16z</a>), Polychain Capital and Peter Thiel-backed Valar Ventures.

Saudi mega-project commits to $50M investment in Web3 gaming firm Animoca

Sebastian Sinclair

<div id="highlights-block_621edb3f6c7cb" class="highlights">
 <ul>
 <li>The gaming and metaverse giant said it wanted to avoid being &#8220;financially excluded&#8221; for fear of being associated with a sanctioned country</li>
 <li>It is unclear whether the company will block purchases of SAND, the utility token used within a metaverse produced by The Sandbox, Animoca&#8217;s subsidiary</li>
 </ul>
 
</div>



Blockchain and metaverse gaming giant Animoca Brands decidedly cut ties with its Russian users on Tuesday, citing sanctions by Western powers over the Ukrainian invasion as justification.



According to a <a href="https://www.bloomberg.com/news/articles/2022-03-01/animoca-breaks-with-crypto-peers-by-cutting-off-russian-users#:~:text=Animoca%20Brands%20Corp.%20Ltd%2C%20one,to%20the%20invasion%20of%20Ukraine." target="_blank" rel="noreferrer noopener">report by Bloomberg</a>, Animoca will no longer provide its services to customers belonging to the former Soviet power by blocking users and restricting access to its shares.



The move comes as Ukraine’s vice prime minister and minister of digital transformation, Mykhailo Fedorov, urged cryptocurrency exchanges in a&nbsp;<a href="https://twitter.com/FedorovMykhailo/status/1497922588491792386?s=20&amp;t=vpx6bGwfVpJ0KnBJkpRXvg" target="_blank" rel="noreferrer noopener">tweet</a>&nbsp;Sunday morning to block addresses belonging to Russian users.



Crypto businesses have been <a href="https://cms.blockworks.co/crypto-exchanges-weigh-blocking-russian-accounts-as-sanctions-intensify/" target="_blank" rel="noreferrer noopener">weighing up</a> a decision to follow through on the minister&#8217;s request, though most have reportedly <a href="https://www.cnbc.com/2022/02/28/binance-will-not-block-russian-accounts-after-ukraine-request.html" target="_blank" rel="noreferrer noopener">decided not to pursue</a> such measures. Animoca, by contrast, has become one of the few in the industry to comply.



It is unclear whether the company will attempt to block purchases of SAND, the utility token used within a metaverse produced by Animoca&#8217;s subsidiary The Sandbox. Animoca did not immediately respond to Blockworks&#8217; request for comment.



On Feb. 24, Russian troops were ordered to cross into Ukrainian territory by President Vladimir Putin following weeks of US intelligence warnings. The invasion was swiftly condemned by most of the Western world which also moved to sanction major Russian banks, oligarchs and businesses. 



Sanctions extended to Russian financial institutions&#8217; use of the SWIFT interbank settlement system, hindering their ability to operate effectively within the global financial system. 



In an interview with Bloomberg and cited in the report, Animoca co-founder Yat Siu said the company&#8217;s decision would likely affect subsidiaries such as Gamee and blockchain fitness company Lympo, although — given the low population of Russian users — it was unlikely the impact will be substantial.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The legal advice we’ve been receiving is we now have to impose some restrictions,” said Siu. “It’s a sanctioned country on par with North Korea. The moment we end up doing business in those areas, we might ourselves become financially excluded from the financial system.”</blockquote>



Hong Kong-based Animoca was founded in 2011 with a focus on developing and publishing mobile games and applications. The company, which has since branched out to blockchain and artificial intelligence, has raised a total of $627.7 million in funding, according to data provider <a href="https://my.pitchbook.com/profile/65039-59/company/profile#deal-history/186770-35T" target="_blank" rel="noreferrer noopener">Pitchbook</a>.



The company received $358.89 million of development capital in January via Liberty City Ventures, Delta Blockchain Fund and 10T Holdings, among others, boosting the company&#8217;s pre-money valuation to $5.44 billion.



That, in turn, had doubled from a $267.8 million private equity deal in October where Animoca was valued at $2.2 billion.



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Blockchain Gaming Giant Animoca Brands Halts Services to Russian Users

Jacquelyn Melinek

<div id="highlights-block_620a848d47e60" class="highlights">
 <ul>
 <li>A Guild Accelerator Program will provide up to $500,000 for each early-stage startup selected</li>
 <li>Crypto-focused gaming grew exponentially over the last 12 months, and market players expect it to continue this year and further crypto adoption</li>
 </ul>
 
</div>



The Sandbox’s parent company, Animoca Brands, has partnered with venture accelerator Brinc to launch its Guild Accelerator Program and expand the global play-to-earn ecosystem.



The two companies will provide a total investment of up to $30 million over the next two years in increments of $500,000 or less for each early-stage group accepted into its <a href="https://www.brinc.io/guild/" target="_blank" rel="noreferrer noopener">program</a>.



The program aims to help millions of people globally generate income by participating in the play-to-earn (P2E) gaming world through crypto gaming.



Priority will go to applicants committed to sustainability, including projects that “support and give back to player/scholar communities, place emphasis on energy-efficient proof-of-stake protocols and side chains, and have lower overall physical footprints,” according to the announcement.



Brinc closed a <a href="https://www.prnewswire.com/news-releases/brinc-closes-us130m-funding-led-by-animoca-brands-to-launch-web-3-0-focused-accelerators-and-fuel-global-expansion-301444835.html" target="_blank" rel="noreferrer noopener">$130 million funding raise</a> led by Animoca Brands two months ago, aiming to focus on expanding its accelerator programs.



“Web3-enabled guilds provide an on-ramp for the future of earning in a way that Web2 and traditional industries never could,” Manav Gupta, founder and CEO of Brinc, said in the release. “Guilds can help transform education, skill development, agriculture, R&amp;D and almost any industry where access to tools and assets historically prevented anyone with time to innovate, up-skill and thus earn a living.”



Animoca incubates and backs NFT, blockchain gaming and metaverse projects as well as supports development on blockchains including Flow and Polygon. It has previously backed over 150 NFT- and metaverse-related companies, including OpenSea, Dapper Labs, Axie Infinity and Yield Guild Games. Last month, the firm raised <a href="https://cms.blockworks.co/the-sandbox-parent-animoca-brands-raises-359m-to-build-out-open-metaverse/" target="_blank" rel="noreferrer noopener">$358 million</a> to build out the open metaverse.



“As the world enters a new era of work and play, the play-to-earn guilds space has enormous potential for growth,” Yat Siu, the co-founder and chairman of Animoca Brands, said in a statement.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The management of digital assets in games and in the open metaverse represents a significant source of income for hundreds of millions of people,” Siu commented.</blockquote>



In general, crypto-focused gaming grew exponentially over the last 12 months, and market players expect it to continue this year and <a href="https://cms.blockworks.co/2022-prediction-gaming-will-lead-to-further-crypto-adoption/" target="_blank" rel="noreferrer noopener">further crypto adoption</a>.



The popular P2E game Axie Infinity initially anticipated an “aggressive target” of 250,000 users by the end of the year but finished 2021 over 1,000% higher at 2.9 million community members, Blockworks previously <a href="https://cms.blockworks.co/axie-infinity-program-lead-2022-will-be-all-about-gameplay/" target="_blank" rel="noreferrer noopener">reported</a>. By the end of 2021, the game’s total revenue reached about $1.3 billion, compared to $18.8 million six months earlier.



Separately, capital flowed into the P2E gaming space over the past few months with initiatives like Mechanism Capital’s <a href="https://cms.blockworks.co/mechanism-capital-launches-100m-fund-focused-on-p2e-gaming/" target="_blank" rel="noreferrer noopener">$100 million fund</a> and a joint fund, also <a href="https://cms.blockworks.co/?s=gaming#:~:text=GameStop%2C%20Immutable%20to%20Launch%20%24100M%20Joint%20Fund%20for%20Gaming%20NFTs" target="_blank" rel="noreferrer noopener">$100 million</a>, announced by GameStop and Immutable for gaming NFTs (non-fungible tokens).



Animoca Brands and Brinc were not available for comment Monday.



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