Crypto Firm Animoca Enjoys Multibillion-Dollar Valuation Amid Pandemic Bull Run

Introduction

Crypto tokens, games, images, and start-ups experienced a significant surge in value during the pandemic. This surge transformed Animoca from an ASX reject to a multibillion-dollar firm almost overnight.

Financial Stability and Legal Compliance

In a report lodged with ASIC in June, Animoca’s auditors, DFK Collins, highlighted the importance of the company’s ability to raise capital, maintain the support of its creditors, convert cryptocurrencies into traditional money, and comply with legal regulations in order to continue operating.

CEO’s Visit to Australia

Mr. Siu, the CEO of Animoca, recently visited Australia to meet with the company’s Australian shareholders. This visit marked his first trip to the country since the start of the pandemic.

Dismissal of Auditor’s Warning

During his visit, Mr. Siu dismissed the auditor’s warning regarding $US110 million in notes issued by Animoca last year. These notes have a 10% interest rate and are due in 2025. Holders of these notes also have the option to convert them into shares in the company. Mr. Siu stated that this is not a going concern issue and that the company has a reasonable cash position and equity.

Partnership with AFL

Delayed Accounts and Valuation

The company’s accounts, which were lodged in June, were several years late due to the difficulty of valuing cryptocurrency assets and start-ups. These issues, along with regulatory challenges, also led to the company’s delisting from the ASX. The accounts provide the most recent audited insight into Animoca and confirm its $US5.5 billion valuation from the recent capital raising.

Recent Capital Raising

Animoca recently raised $US20 million through a funding device called a SAFE note. This round of funding is small compared to the company’s valuation but offers investors more protection. The investors also receive token rights. The capital raised will fund Animoca’s “Mocaverse” project, which aims to unite the company’s extensive crypto holdings.

Financial Performance and Future Outlook

Animoca’s 2020 annual report reveals a revenue of $28 million and a loss of $60 million. However, its bookings, reflecting customers buying cryptocurrency tokens, totaled $49 million. Despite the losses, Mr. Siu remains bullish on cryptocurrency and believes in its strength and resilience.

Conclusion

Animoca’s transformation from an ASX reject to a multibillion-dollar firm highlights the success of crypto tokens, games, images, and start-ups during the pandemic. The company’s ability to raise capital, maintain financial stability, and comply with legal regulations will be crucial for its continued success.