Blockchain gaming company Animoca Brands has consolidated its position within the fast-growing mobile gaming sector after announcing the sale of its Gamma Innovations subsidiary to RightBridge Ventures for around $1 million in scrip.
Both companies declared the strategic partnership will enable investors to invest in some of the most futuristic industry changes being spearheaded by Animoca Brands.
Gamma Innovations offers a PC application that allows users to leverage their computers’ idle processing power to generate Gamma Points while mining for cryptocurrencies such as Ethereum. The business model is for Gamma to collect 50% of the value from mined tokens while users receive Razer loyalty credits called Razer Silver.
Animoca Brands first acquired Gamma for US$350,000 (A$480,000) in mid-2019. After a year of close collaboration, the company said it is now able to “release substantially more strategic value” through the sale of Gamma.
Importantly, the original earn-out obligations accepted by Animoca Brands will be transferred to RightBridge Ventures as part of the agreement.
At the time of the transaction, Gamma’s proprietary software had over 35,000 unique active users with a broader addressable audience of around 60 million, courtesy of the commercial relationship between Gamma and Razer.
In a public statement, Animoca Brands said it has initiated an organic “strategic partnership” with RightBridge as a result of the acquisition.
The deal will see RightBridge Ventures, an investment company based in Stockholm, Sweden, acquiring Gamma Innovations in full in exchange for 9 million fully paid RightBridge Ventures shares for a total value of about $1 million.
The acquisition effectively means Animoca Brands will become a strategic shareholder of RightBridge Ventures with a fully diluted ownership stake of approximately 5%.
The rationale for the deal is to combine Animoca Brand’s current position and market strategy of pivoting towards mobility, multiplayer networking and full ownership of in-game digital items, with RightBridge Ventures’ expertise in scaling up innovative companies and access to European and Scandinavian capital markets, the company said.
For the Swedish investment company, the deal and broader partnership with Animoca Brands is expected to boost the company’s plans to list on the Swedish stock exchange later this year.
According to the terms of the deal, if RightBridge Ventures fails to list on a public exchange by the end of March 2021, Animoca Brands will have the right to terminate the deal and reclaim ownership of the 9 million shares used to fund the deal.
Moreover, RightBridge shares that Animoca Brands receives as consideration for the sale of Gamma will be subject to a lockup, ending six months after RightBridge Ventures’ public listing.
The transaction is expected to be fully completed by 31 August 2020.