The Big Whale: Everyone is talking about the falling markets as if it's the end of the world. Do you see things the same way?
Yat Siu: A lot of people are talking about "crypto winter" and explaining that the Web3 ecosystem is doing badly, but that's simply not true. It's a matter of perspective. If you refer to the market a year ago, then indeed the market is not at its best. Crypto and NFT prices have fallen a lot.
But if you look back three years, the market and the ecosystem are in great shape. lThere have never been so many Web3 start-ups, investment has never been so high. Since the start of the year, metaverse players have attracted $7 billion in investment, which is by far a record.
Animoca Brands is therefore doing rather well?
Better than ever (laughs) ! Once again, there are the much-talked-about markets that are the surface, and then there are all the projects that are being built and developed beneath that surface 🐳. It's the latter that we're betting on. In the last three months alone, we've invested in 40 start-ups, a total of 380 projects.
Have any of your portfolio companies been affected by the market downturn?
Of course, we've had a few problems with projects, but these are isolated cases. 99% of our portfolio companies are doing well, very well in fact. The ones that are struggling all have the Terra ecosystem and the collapse of UST
You raised $400 million earlier this year, and just over $100 million again just a few weeks ago. Why is that? Do you need the money?
Animoca Brands (900 employees) is a rather unusual company. We see ourselves as a gateway to Web3 for companies that want to invest in it. Our aim is to attract all the companies that don't know how to penetrate this sector.
The latest round of financing was carried out with several players that we know very well, such as the True Global Ventures fund (one of the main investors in Animoca Brands, editor's note), and there are also new entrants such as the GGV fund, Temasek (Singapore's sovereign wealth fund) and Boyu Capital. For us, it's important to attract players from the traditional world. We want to bring the two worlds closer together.
What do these investors like?
The strength of Animoca Brands is our knowledge of the market and our transparency: when you invest with us, you are in it for the long term, not for short-term performance. And we have a very strong belief in the future of Web3, in the values it embodies, such as control over data, decentralisation... That's why we invest in so many projects. Too many funds are looking for the right horse, the investment that will make them billions quickly, but this vision is so Web2, it doesn't work like that in Web3.
Are you not afraid of investing in too many companies?
Not at all. Whatever our investments, we always follow two main principles:
The first is that the project must always have a link with the NFT market. The second is that it must be linked to mass adoption.
This approach is very advantageous because if one of the projects we've invested in doesn't work, we can find another use for it. Take the case of a Bored Ape (read our survey) , a land in Decentraland or a Cool Cats. They can be used in a whole range of universes. That's the whole advantage of the interoperability of metavers and blockchain.
Is The Sandbox your biggest investment? What exactly is the link between Animoca and The Sandbox?
The Sandbox is one of our first investments in the sector. We have a majority stake. We have also invested in Decentraland. In 2018, there wasn't much choice when it came to metavers, so we chose to invest in both.
Do you think there will be several hundred, or even several thousand metavers?
How many cities are there in the world? At least hundreds of thousands. A metaverse is like a city, you move in and out of it. So I think there will be as many metavers as there are cities.
When Animoca Brand was founded in 2015, it was a video game studio. Today you are an investment company. Why this shift?
Some people refer to us as a Web3 conglomerate, others as the Tencent of Web3... But in reality, we are neither. Tencent is a video game giant. They own Riot Games, Supercell, they have shares in Epic Games (which is getting into NFT, editor's note). In short, they're everywhere. But their objective is not to develop the world of gaming, they want to put this sector under Chinese domination. That's not our vision at all.
We were one of the first investors in The Sandbox and Decentraland. We could have focused on these two metavers and become hegemonic, but that's not our philosophy. We want to create a truly decentralised Web3, and that's why we've invested in metavers like Trivver and Blocktopia. We also participated in the development of Otherside, the Bored Ape metaverse. These projects only have value because there are others, because there is competition, like Apple versus Samsung. It's a question of philosophy.
Will you continue to invest?
We think that we need to reinvest in this ecosystem so that it continues to grow. That's what made Silicon Valley so successful. When you go to Palo Alto and the surrounding area, the Internet connection is not very good, the infrastructure is ageing, and yet it's the Mecca of Tech, where a lot of big projects are still being launched. And why is that? Because it's not just the internet connection and the roads that count, you also need the right mentality, and over there, people reinvest a lot.
They don't keep the money for themselves. They always reinvest in the ecosystem, whether it's a small start-up or a giant that's going to join Wall Street. That's exactly our mentality. I want us to give back to the sector what it has given us. In Silicon Valley, if you don't invest in new start-ups, you're not cool.
How does Animoca Brands make money?
The vast majority of our revenue comes from transaction fees, the sale of NFTs, plots in metavers. We also have a lot of cryptos (over $3 billion, editor's note). In the first half of the year, we recorded $550 million in revenues, a figure that is significantly higher than 2021.
You are currently valued at $6 billion. Do you plan to go public? And when?
Yes it's planned, but we still have a number of points to sort out, particularly with regard to accounting
What do you think of Europe? Is it at the forefront of Web3?
I'm touring Europe and the same culture can be felt just about everywhere. I think Europe has a card to play because it has champions and can put in place regulations that will make it a leader.
