Animoca Brands Aims for $1 Billion Nasdaq Listing Through Reverse Merger

Animoca Brands, a prominent player in blockchain technology and cryptocurrency investment, has signed a non-binding agreement with the Nasdaq-listed company Currenc Group for a reverse merger. This strategic move aims to achieve a valuation of around $1 billion, with the deal expected to close by the end of 2026. The merger not only facilitates Animoca's return to public markets but also reflects its ongoing growth and evolution in the crypto space.

Key Takeaways

Animoca Brands is negotiating a reverse merger with Currenc Group, targeting a valuation of approximately $1 billion.
The merger will allow Animoca's shareholders to own around 95% of the new combined entity.
Animoca's revenue for 2024 reached $314 million, showing a 12% increase from the prior year.
The deal includes plans for regulatory approvals in both the U.S. and Australia.
Animoca's investment strategy focuses on altcoins but faces market volatility challenges.
The company is expanding operations, including establishing a New York office and strategies for a Hong Kong dollar stablecoin.

A New Chapter in Public Markets

Animoca Brands has initiated a non-binding agreement with the Hong Kong-listed Currenc Group for a reverse merger. This strategic alignment aims for a valuation of about $1 billion, with plans for the transaction to finalize before the end of 2026.

As part of this merger, shareholders of Animoca would collectively hold around 95% of the shares in the newly formed entity, while the current shareholders of Currenc would keep approximately 5%. This development marks Animoca's re-entry into the public arena, following its delisting from the Australian Securities Exchange in 2020 due to governance issues and its associations with crypto activities.

In 2024, Animoca reported revenues totaling $314 million, representing a 12% increase compared to last year. Notably, $165 million of this revenue stemmed from its digital asset advisory services, alongside investments in over 600 Web3 companies, which include key players like Consensys and Kraken.

Moving Towards Public Listing

Both Animoca and Currenc have established a three-month exclusive period to finalize the merger terms after signing the letter of intent. To proceed, they must obtain regulatory approvals from the U.S. and Australia, along with audited financial statements from Animoca for recent fiscal years.

Additionally, the merger needs the backing of shareholders from both companies and approval from an Australian court. Currenc plans to divest certain operations as part of this transaction. Executive Chairman Yat Siu mentioned that the new structure would create a holding entity incorporated in the Cayman Islands, a popular arrangement for foreign firms seeking Nasdaq listings, enhancing liquidity and access to institutional investors.

According to Currenc’s co-founder and CEO, Alexander Kong, this merger symbolizes a “transformative milestone” intended to unlock substantial value for shareholders. Additionally, Republic has announced plans to tokenize Animoca shares on the Solana blockchain, providing global investors with access to these digital tokens on its compliant marketplace.

This initiative taps into the increasing interest in tokenizing real-world assets, with Animoca's researchers estimating this could unlock a $400 trillion market within traditional finance.

Navigating Market Challenges with Altcoins

Animoca's investment strategy largely revolves around what Yat Siu refers to as “a leveraged bet on altcoins,” with a majority of its portfolio consisting of tokens from early-stage startups. The company has a specialized trading team dedicated to generating yields from these investments.

However, the performance of altcoins lagged significantly behind Bitcoin in 2024, suffering major declines during October’s market crash that saw approximately $19 billion wiped from crypto investments. Despite these market challenges, Animoca concluded 2024 with robust fundamentals, boasting total assets around $4.3 billion.

Although private investment holdings dipped to $564 million from $690 million in 2023, the company expanded its investment portfolio from 450 to 540 holdings during that time. Revenue derived from incubated projects, which include successful ventures like The Sandbox and Mocaverse, contributed $110 million, alongside $39 million from investment activities, thus diversifying its revenue streams.

Animoca's appraisal faced pressures from the wider market volatility, which decreased its valuation from $5.9 billion during fundraising rounds in 2022 to roughly $1.5 billion in secondary markets by mid-2024. Nevertheless, the company remains profitable, with nearly $300 million in cash and stablecoins, and over $500 million in digital assets. The shift in investor focus towards traditional equities has led to decreased retail investment in altcoins compared to previous cycles.

Foundation for U.S. Growth

In May, Animoca launched a New York office, heralding an expansion driven by the favorable stance towards cryptocurrencies under President Trump. Siu noted the shift in policy from the Biden administration, indicating that a year ago, Animoca would not have considered a U.S. listing viable.

The company is endeavoring to bolster its institutional business through a joint venture with Standard Chartered and HKT aimed at developing a Hong Kong dollar stablecoin, alongside a partnership with Provenance Blockchain Labs for a marketplace dedicated to real-world assets.

Employing over 700 individuals, Animoca is evaluating options for dual listings. Siu emphasized that “Hong Kong will always remain significant for us due to our extensive user base in Asia.” With this merger, Animoca joins the ranks of other crypto firms such as Kraken and Ripple, all intending to pursue U.S. listings in 2025 as regulatory environments improve and market conditions stabilize.