October 2023

Animoca's Mocaverse

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In September, CMCC Global led the investment round in Animoca Brand’s latest metaverse project called Mocaverse. Animoca is Hong Kong’s, and the world’s, leader in blockchain gaming, NFTs, the metaverse and social blockchain applications.

The company is unifying its ecosystem of over 450 web3 projects through one common access point. The project is building web3 native tools that empower users to create their digital identities, accumulate reputation, earn and spend loyalty points, and access the Mocaverse ecosystem. We have known the founder Yat Siu since 2017 and are impressed by his pedigree and track record as he pioneers web3 consumer applications. This month we will dive into our rationale for this exciting investment.

When it comes to consumer facing applications in the digital asset space, Animoca Brands is the undisputed leader. The company was founded in 2014 and is a portfolio of video games, digital media brands, IP, and blockchain infrastructure technologies focused on allowing users to truly own their digital assets. Animoca develops mobile games and subscription products, leveraging internationally recognized IP like Marvel Comics, the NBA, Hello Kitty, and many more. Animoca uses its portfolio of assets to create collectibles platforms and virtual worlds where unique digital assets (NFTs) can be purchased, used within games, collected, and traded on secondary markets.

In addition, Animoca acquires and invests in brands in the digital asset space. These investments include Axie Infinity, The Sandbox, Decentraland, and Dapper Labs (creators of CryptoKitties and NBA Top Shot). It also has a stake in OpenSea, the largest NFT marketplace in the world, and in Flow, a layer-1 blockchain focused on scalable and cost-efficient NFTs.

Animoca has assembled the largest collection of web3 companies in the world, focused on culture and entertainment. It has an addressable web2 and web3 user base of over 700m people across its 450 portfolio companies. Animoca is now looking to tie these properties and the combined user base together through its new Mocaverse project and MOCA token. The Mocaverse will act as a focal point of discovery, allowing users to navigate digital culture and entertainment. It will provide rich experiences and identity management within the web3 world.

There are four core pillars of Mocaverse:

  • Onboarding – Mocaverse will offer an “Identity Pass” to over 700m web2 and web3 users within its audience. Users can join the ecosystem by free-claiming their Moca ID soul-bound token with a proprietary web2-friendly account system. A soul-bound token is one that cannot be transferred out of a wallet once it has been created. It can therefore be used as an identity token that cannot be shared. Identity Pass will become a core online identity, akin to a Facebook log-in or Apple ID. It will store user data, but importantly it will be owned and controlled by the user.
  • Discovery – Mocaverse will host a discovery platform that will act as a gateway to Animoca’s 450+ web3 products. The platform will offer rich digital media experiences and will facilitate user cross pollination between different Animoca properties. The MOCA token will power the platform and will be adopted by ecosystem participants, making it easy for participants to try out different games and experiences by using a single asset.
  • Engagement – there will be a loyalty program within Mocaverse known as Moca XP, which will work in a similar way to web2 loyalty programs provided by airlines or coffee shops. The program will reward engagement on the platform and will have the composability benefits of being web3 allowing for integrations with games and properties within the Mocaverse. Moca XP and the MOCA token will be interoperable across blockchains and the aim is for them both to be widely adopted.
  • Governance – Animoca itself holds a large collection of tokens, many of which have governance rights attached to them. There will be a MOCA DAO that is controlled by MOCA token holders. This DAO will be endowed with the governance rights of select holdings within the Animoca portfolio. This will make the MOCA DAO a “DAO of DAOs” with the power to vote on topics in a range of crypto ecosystems.

There are several reasons that make this a highly attractive investment. Firstly, the team behind Mocaverse is proven and has been extremely successful in building at the intersection of the metaverse, digital assets and entertainment. Animoca’s founder, Yat Siu, is regarded as the most prominent thought leader when it comes to NFTs, gaming and crypto culture. We have known Yat for the past 7 years and have through our prior Funds 1, 2 and 3 invested in his holding company Animoca back in 2018. Two years ago, we interviewed Yat, and back then before NFTs had really taken off, his clarity of thought and original perspective relating to digital culture was clear. He has continued to be a leader in the space and has propelled Animoca to ever greater heights. Yat has surrounded himself with an exceptional team that has shown the ability to execute time and again.

Secondly, Mocaverse is addressing several core problems that directly impact crypto adoption. Success here will result in a userbase in the hundreds of millions. Digital identity is currently broken, with data owned by third parties and not by the individual. Discovery within web3 is also fragmented and a challenge. Identity Pass coupled with the discovery platform could result in millions of Internet users onboarding into web3 through the Mocaverse. The loyalty program and novel MOCA DAO should boost engagement on the platform and we expect it to become a leading metaverse, gaming and cultural hub for a new and improved Internet.

Finally, the structure of the transaction is attractive. In this relatively unique situation, the combination of both equity and token makes sense. There is downside protection from the equity component of the deal coupled with substantial upside potential from the token. As a result of this structure, we have invested through our Digital Asset Fund 3B, Fund 4 as well as via a warehoused deal for our Titan Fund.

CMCC Global acted as the lead investor in this fundraising round and we were thrilled to do so. The combination of an exceptional team, visionary product and attractive deal structure made this a straightforward investment decision. The next wave of crypto is likely to revolve around the mass adoption of web3 through consumer facing applications. Mocaverse is a perfect example of this. It is consumer facing, innovative and with distribution opportunities through a wealth of existing Animoca Brand portfolio companies. We foresee the Mocaverse becoming a gateway to web3 and the next iteration of the Internet.

Read more here: Animoca Brands raises USD20M for Mocaverse Web3 project