Hong Kong crypto game unicorn Animoca Brands pours US$30 million into crypto exchange start-up Hi amid Web3 winter
- The investment forms part of a new strategic partnership between Animoca and Hi, an app that combines crypto exchange and mobile banking features
- Hi recently launched a trading platform exclusively for Hong Kong, where authorities put forward some of the world’s most exacting crypto rules
Blockchain game software unicorn Animoca Brands is injecting US$30 million into Hi, a cryptocurrency exchange start-up also based in Hong Kong, even as funding dwindles for similar businesses worldwide amid growing regulatory risks and economic uncertainties.
Hi was started in 2021 by founders that include former Crypto.com executive Sean Rach.
Hi’s namesake app combines crypto exchange and mobile banking features, the firm said. The platform also facilitates cryptocurrency trading and allows users to sign up for a Mastercard debit card that lets them make payments in cryptocurrencies. Most users will receive an electronic card, while those in some European countries will also get a physical card.
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Since last month, crypto exchanges must seek a licence with the Hong Kong Securities and Futures Commission (SFC) to sell and market to the city’s consumers. Exchanges that already had a major presence in Hong Kong have a one-year window to continue operations while they prepare to comply with the new rules or exit the market.
Hi said it has completed pre-registration activities under the supervision of the SFC to secure its license as a virtual asset trading platform. The company’s global platform now has more than 3.5 million users, 1 million of whom have passed so-called know- your-customer checks, it said.
As part of the new partnership with Animoca, Hi users will be able to spend and receive Animoca tokens, such as Sand, among other initiatives.
Animoca’s capital injection comes despite rising caution by investors worldwide, as the US ramps up scrutiny of the crypto sector and as interest rates surge to their highest point in more than two decades.
In the first quarter, the value of crypto-related venture investment deals plunged 78 per cent year on year to US$2.6 billion, while deal numbers declined 64 per cent, according to Pitchbook Data.
Funding value dropped further to US$2.34 billion in the second quarter, according to TechCrunch, citing Pitchbook data that has not been made public.
Animoca, which has more than 450 start-ups in its investment portfolio, was valued at nearly US$6 billion last July in a funding round led by Singapore’s state-investment company Temasek.
Since then, its valuation had slipped below US$2 billion, according to a Reuters report in March, while sales offers published earlier this month on Chinese tech news site 36Kr valued the firm at US$4 billion.
“Trading of our shares on secondary markets does not provide a reliable indication of value, given that the total volume in such transactions is very thin,” an Animoca spokesman said on Thursday.
Animoca said in May that it held US$194 million in cash and stablecoins – a type of cryptocurrency pegged to an asset, usually fiat money – in addition to US$566 million in liquid digital assets. It also held US$2.7 billion in tokens from all of its majority-owned Web3 subsidiaries, it said.
