Animoca Brands maintains profitability during COVID-19

Animoca Brands profit COVID-19 F1 Delta Time The Sandbox NFT Crazy Defense Heroes
Animoca Brands reported a record $10.5 million in revenue in the first four months of 2020.

Despite de-listing from the ASX earlier this year, gaming company Animoca Brands became cash flow positive in April and intends to continue its revenue streak through to year-end, despite the ongoing COVID-19 pandemic.

Earlier this year, Animoca Brands said it generated $10.5 million in revenue in the first four months of 2020, including $4.3 million in April alone – driven by the successful sale of digital collectables, also known as “non-fungible tokens (NFTs)” including crate sales in F1 Delta Time, LAND sales in The Sandbox and collectable NFT hero sales in Crazy Defense Heroes.

The gaming company has also stated that its revenue growth is “accelerating” following strong increases over the past five years with a CAGR of 19%.

In 2019, revenue rose 39% to $17.9 million while the first quarter of 2020, revenue rose by 44% to $6.2 million.

In April this year, the company achieved a positive cash flow status and reported an EBITDA of $380,000 for the year.

A few months later in July, Animoca Brands acquired social gaming platform Gamee in a deal worth more than $8 million.

At the time, the company said the acquisition gave Animoca Brands access to in-house skills in HTML5, thereby expanding the company’s suite of abilities within game development.

Gaming and growing

A large part of Animoca Brands’ market strategy is leveraging partnerships with existing brands in sport and entertainment.

The company has secured partnerships with some of the biggest brands in showbiz including Disney (NYSE: DIS), Marvel, Formula 1, and wrestling giant WWE (NYSE: WWE).

To establish a longstanding position in gaming, Animoca Brands is turning to mobile and blockchain as the two prime differentiators for its development work.

In a recent statement, the company said it was forging a pathway for consumers, rather than game companies, to securely own their digital assets by leveraging blockchain technology in games.

Animoca Brands currently develops blockchain-enabled games, which facilitates a genuine form of digital ownership of in-game content and collectables in its games. The digitised approach allows players to maintain ownership features across games and platforms, compared to the traditional game industry, where content is owned by the developer/publisher and rented by the player.

On 3 July 2020, Animoca Brands completed a US$4.1 million (A$6 million) unsecured convertible note offer to global investors, led by Mind Fund Group and M7 Alternative Investment Strategies Asia Limited, with a 9% coupon and conversion to equity at $0.18 per share.

Alongside the capital raise, the company announced it had total liquid assets of $8.7 million including $6 million in cash, $1.1 million in Bitcoin and Ether and $1.6 million in other cryptocurrencies.