One year on, a $200 million investment program from Animoca and Binance falters

Quick Take

  • Few investments have been closed through a $200 million co-investment program unveiled by Animoca Brands and BNB Chain one year ago.
  • The news comes as Animoca prepares to launch a new $2 billion fund for later-stage metaverse bets.

In December 2021, before the crypto winter set in, Animoca Brands and Binance Smart Chain (now known as BNB Chain) trumpeted a new $200 million investment program for crypto gaming startups. One year on, precious few investments seem to have been made.

Data provided by Dealroom show that Animoca, a web3 gaming and software giant, and Binance Labs, the crypto exchange’s investment arm, have participated together in the same funding round just three times since the program — which aims to incubate games built on BNB Chain — was unveiled. Even those deals do not appear to have come through the joint funding initiative.

The recipients in question were crypto gaming startups Heroes of Mavia, Community Gaming and Tatsumeeko, which raised $5.5 million, $16 million and $7.5 million, respectively, between January and June this year. A person with direct knowledge of the matter said that none of those rounds came through the co-investment program. That makes sense, given that Heroes of Mavia is built on Ethereum, Tatsumeeko on Ethereum and Solana, and Community Gaming is not a game at all, but a platform offering e-sports infrastructure.

Few takers

When asked about the program’s progress, a spokesperson for Animoca highlighted half a dozen more “joint investments” made by Animoca and Binance — in BlinkMoon, CryptoSlam, Avocado Guild, GuildFi, Gamee and LiveArtX — but with a few possible exceptions these, too, do not appear to be part of the $200 million program. Gaming guilds Avocado Guild and GuildFi both raised money before the program’s launch; CryptoSlam is an NFT data aggregator, not a developer building on BNB Chain; LiveArtX is a digital art trading and discovery site; while Gamee was acquired by Animoca in 2020, and only took strategic funding from Binance Labs in February this year. Gaming studio BlinkMoon alone may fit the program’s criteria. 

While the so-called crypto winter is one potential cause of the program’s slow start, another is that the crypto gaming sector is still in its infancy. 

Gwendolyn Regina, investment director at BNB Chain, told The Block that web3 gaming remains “a fairly nascent space” despite the relative success of games like Axie Infinity and The Sandbox. “Without a solid infrastructure and set of tools, we cannot build great gamefi projects,” she added. The co-investment program appears to have adjusted accordingly. 

“The fund started with a mission but we allowed it to extend into other areas, such as guilds that we considered supportive of the gaming ecosystem, since it made sense. We have made investments and continue to collaborate, so it should come as no surprise that, given the events of 2022, investments may be slower than expected,” Regina said.

Animoca and BNB Chain have worked together, she said, by “frequently co-sharing insights, dealflow, opportunities for partnerships across both ecosystems,” but added that she “cannot reveal the full extent of our partnership.”

One other notable collaboration by Binance and Animoca was the $150 million fundraise by Axie Infinity creator Sky Mavis in April, days after it lost $540 million to a crippling hack. But The Block later revealed that Binance had substantially scaled back the size of its investment in that round — one that wouldn’t have fit the co-investment program’s criteria anyway.

'Crypto's mass adoption'

When it was announced, BNB Chain’s Regina said in a blog post that gaming’s “large-scale real life use case makes it one of the core focus areas for crypto’s mass adoption to onboard retail consumers into the Web 3.0 world.” 

The program was part of $1 billion growth initiative by BNB Chain, with $100 million from that pot set aside for co-investments with Animoca, which also set aside $100 million.

Animoca Brands is perhaps the world’s most active crypto gaming investor. Its hundreds of bets include The Sandbox, Dapper Labs and Star Atlas. Although its collaboration with Binance has stalled, Animoca has been anything but inactive. The Hong Kong-based company made over 60 investments in the first half of this year. It has made more than 380 investments in total, according to a spokesperson.

Last week, Animoca’s founder Yat Siu said the company is planning to launch a new fund of up to $2 billion in size to invest in mid- to late-stage metaverse companies.

This story has been updated to reflect the total number of investments made by Animoca. 

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.