Animoca Brands’ valuation fell 75% in two years due to the NFT market downturn, but the company continued to grow with a Lamborghini partnership.
Crypto conglomerate Animoca Brands has experienced a dramatic decline in its valuation, dropping over 75% in the past two years, as reported recently.
The company’s secondary shares are currently valued at just $1.5 billion, a sharp decrease from the $5.9 billion valuation held in July 2022.
What’s Behind the Drop in Animoca’s Valuation
Concerns have surged over Animoca Brands’ valuation decline. Despite the firm reporting a total of $3.3 billion in crypto, cash, and equities in its financial results for the first quarter ending in March, the secondary market has reacted differently.
According to Animoca’s executive chairman, Yat Siu, the company’s shares are now trading at a $1.5 billion valuation, marking a significant 75% decrease from the $5.9 billion valuation when it raised $75 million in July 2022.
Siu’s assessment of Animoca’s current trading value matches data from Bulletin, which tracks information on crypto companies via brokers and trading platforms.
A major factor contributing to this steep drop could be the significant slowdown in the NFT market, where Animoca holds a strong position.
Although the broader crypto market has recovered from the 2022 crash, the NFT sector has not.
NFT trading volumes, which were around $6 billion in January 2022, have now plummeted to $430 million as of July 2024.
Despite these challenges, Animoca has managed to navigate the downturn and is even considering an IPO.
Siu noted that if the company were publicly traded on Wall Street, the difference between its current valuation and the net value of its assets would likely correct itself.
“It’s just an information mismatch. If we were actually properly listed, that would probably error correct,” Siu explained to DL News.
Partnership With Lamborghini
Amid these difficulties, Animoca Brands continues to pursue its objectives in the NFT market.
The company recently partnered with the Italy-based luxury car manufacturer Lamborghini to “drive automotive brand engagement.”
In an official blog post, Animoca stated that this collaboration aims to combine the expertise of both companies to create “unique experiences for Automobili Lamborghini’s fans and customers.”
Lamborghini is also expanding its presence in the blockchain industry. In August 2022, the automaker partnered with NFR Pro to launch a series of company-branded non-fungible tokens.
