Hong Kong's Animoca Brands secures US$50 million from Saudi state project to promote regional Web3 development
Hong Kong-based blockchain video gaming firm Animoca Brands has secured US$50 million in fresh funding from Neom Company, a smart city project in Saudi Arabia owned by the Public Investment Fund, which comes as the two markets continue to build closer economic ties.
The two signed a memorandum of understanding to work on Web3 initiatives meant to align with the Saudi Vision 2030 plan, of which Neom is one of several key projects, Animoca announced on Monday. Half of the funding will come through the issuance of convertible notes capped at A$4.50 (US$2.86) per share, it said, and the rest of the funding will come through shares bought on the secondary market.
The partnership will see the companies work together on building out enterprise Web3 services and to "nurture the local Web3 ecosystem" by bringing in Animoca subsidiaries, partners and investees, the Hong Kong firm said.
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"We are honoured and excited to partner with and receive investment from Neom, one of the world's most ambitious projects seeking to use innovation and technology to redefine how we live, work, and play," Animoca co-founder and chairman Yat Siu said in a statement. "We have always referred to the growth of the Web3 ecosystem as the emergence of a new meta-nation, and now Neom could well become the first region to fully harness the power of blockchain."
The Neom project was announced in 2017 with the goal of turning the 26,500 sq km (10,200 sq mi) area in northwestern Saudi Arabia into a hi-tech trade hub powered by clean energy.
Neom has not offered any details on what its vision is for integrating Web3 technologies like blockchain, but a "Web3 Analyst" job posting from the company in August specified that it was looking for a "metaverse expert" with at least one year of experience working in this area.
Animoca is one of Hong Kong's leading Web3 companies and best known for its games and metaverse subsidiary The Sandbox, which sells virtual plots of land in the form on non-fungible tokens (NFTs). Its partnership with Neom comes as Saudi Arabia has been looking to attract more technology-related investment under its Saudi Vision 2030 plan, which was announced in 2016 as an effort to diversify the country's oil-dependent economy.
The kingdom has been particularly keen on attracting new investment from China, its largest trade partner, and it has been building out relationships in the Greater Bay Area (GBA), which consists of Hong Kong, Macau and nine major cities in Guangdong province.
In July, Saudi Minister of Communications and Information Technology Abdullah Al-Swaha indicated the country is looking to deepen collaboration with Hong Kong as a bridge to mainland China, drawing on the city's strengths in fintech and venture capital.
Invest Saudi, a brand overseen by the Saudi Ministry of Investment, is also considering opening an office in the GBA to augment the office it already has in Beijing, the Post previously reported.
"In terms of Hong Kong and the Middle East, I believe [the Animoca and Neom partnership] demonstrates that opportunities exist, and that there is mutual respect between the territories and a desire to build a brighter future together," Siu said. "Such deals strongly indicate the presence of underlying trust."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
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