Open metaverse and digital property rights company, Animoca Brands have announced the closure of over US$110 million (approximately A$159 million) in strategic funding from the issuance of convertible notes (“Notes”).
The funding round was issued to a small number of institutional investors inclusive of Temasek, Boyu Capital, and GGV Capital, as well as existing investors Mirae Asset Management and True Global Ventures (TGV).
Boyu Capital is an alternative asset management firm based in Asia with over US$40 billion in assets under management.
CGV Capital is a global venture capital firm that invests in seed-to-growth stage investments and manages $9.2 billion in capital across 17 funds.
Temasek is a global investment company headquartered in Singapore, with a net portfolio value of US$297 billion (S$403 billion) as of 31 March 2022.
Animoca Brands co-founder and executive chairman, Yat Siu was incredible please with the additional funding round and commented: “We are honored by the continued support from existing investors. Animoca Brands has grown significantly as a company in the last year, and our new investors will contribute strategic advice and perspective as we build the world’s leading company furthering digital property rights in the Web3 industry.”
Animoca Brands plans to use the new capital to continue its strategy of acquisitions, investments, and product development, secure licenses for popular intellectual properties, and advance the open metaverse, including through its efforts to promote digital property rights for online users.
This new round of funds by Animoca brands joins its raising of over US$75 million in Capital in July.
What is a convertible note? Convertible notes are a form of short-term debt that converts into equity, typically in conjunction with a future financing round. This means the investors are effectively loaning money to a startup and instead of a return in the form of principal plus interest, the investor would receive equity in the company.
What are the terms?
The Convertible Note has a maturity date of 3 years from the date of issuance.
The note can be converted at any time prior to the maturity date at the election of the noteholder for the lower of:
- A$4.50;
- the price per share offered for sale to the public in an IPO;
- the price per share of the Company based on the pre-money valuation of the Company in connection with a liquidation event (including a sale or merger); or
- the lowest price per share of the Company issued in any equity financing round after issuance of the Note and prior to conversion.
Events of default: The Notes are subject to events of default and include governance covenants customary for this type of investment.
The Company has also issued warrants to the same investors for a total face value of US$55 million (“Warrants”). The Warrants are subject to the same Conversion Price as the Notes. The Warrants expire 60 days after the date of conversion of the Notes (in full); the date an IPO or liquidation event is completed (including a sale or merger); or 3 years from the date of issuance of the Notes.
The potential dilutionary impact of full conversion of the Notes is 1.8% based on the Company’s current outstanding capital and the conversion price. If the Warrants are also exercised, the potential dilutionary impact is 2.7%.
Animoca Brands develops and publishes a broad portfolio of products including the REVV token and SAND token; original games including The Sandbox, Crazy Kings, and Crazy Defense Heroes; and products utilizing popular intellectual properties including Disney, WWE, Snoop Dogg, The Walking Dead, Power Rangers, MotoGP™, and Formula E. It has multiple subsidiaries, including The Sandbox, Blowfish Studios, Quidd, GAMEE, nWay, Pixowl, Forj, Lympo, Grease Monkey Games, Eden Games, Darewise, Notre Game, TinyTap, and Be Media.
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