Animoca Brands (ASX:AB1, the “Company”) has entered into an Earn-In Agreement with Zeroth founder Tak Lo to acquire a 67% stake in Venture Classic Limited (“Venture Classic”), the operational company for the artificial intelligence accelerator Zeroth SPC (both companies together: “Zeroth”). Total consideration for the transaction is approximately US$1.08 million (A$1.5 million), consisting of US$0.72 million (A$1 million) in cash earn-in and approximately US$0.36 million (A$0.5 million) in Animoca Brands shares.
Additionally, Animoca Brands has committed to underwrite investment into Zeroth SPC totalling up US$2 million. This investment will provide participants with Limited Partner status and grant them claims on proceeds from the cohorts of AI and blockchain startups accelerated by Zeroth.
Separately, Sun Hung Kai & Co, a leading investment firm based in Hong Kong, entered into a Memorandum of Understanding to develop a deeper strategic partnership with Zeroth SPC. This partnership may include direct investments and further potential investment into Zeroth SPC or its segregated portfolios. Sun Hung Kai & Co previously invested in Animoca Brands.
Zeroth is the first accelerator in the world to focus on artificial intelligence and machine learning. Zeroth was founded by Tak Lo, previously a director at Techstars, the prominent US-based technology accelerator program. Zeroth invests in high-potential start-ups and provides operational, strategic, and networking support to investee companies as they develop their businesses. Separately from its acceleration programme, Zeroth has made a number of investments in blockchain-focused companies.
To date, Zeroth has accelerated three cohorts totalling 33 companies, obtaining an average 6% stake in each, and has made eight investments in companies focused on blockchain technology. Various of these companies went on to raise funding after graduating from the Zeroth acceleration programme, including from prominent venture capital firms Horizons Ventures (invested in Fano Labs, now Accosys), Mizuho Venture Capital (invested in Laboratik), Portag3 Ventures (invested in Planto), KB Investments (invested in Seoul Robotics), and Aeternity Ventures (invested in Utu).
FamFit, the spin-off of Animoca Brands that was later rebranded as OliveX, is a graduate of the Zeroth acceleration programme. The AI capabilities gained through the Zeroth program helped OliveX to win a US$0.55 million Hong Kong government grant to develop an AI exercise app, and led to OliveX establishing a commercial relationship with leading fitness blockchain company Lympo. Lympo went on to invest approximately US$0.36 million (A$0.5 million) in Animoca Brands and has committed to lead a future funding round into OliveX.
Animoca Brands expects that acquiring a stake in Zeroth will extend its capabilities and reputation in product acceleration, especially in the areas of AI and blockchain as well as corporate incubation; increase its visibility and exposure to relevant technologies; and contribute to the Company’s strategic development and growth as it advances further in the AI and blockchain ecosystems.
Yat Siu, co-founder and chairman of Animoca Brands, commented: “We were impressed by Zeroth’s rise to one of the most influential AI accelerators in Asia as well as a major investor in blockchain. As Animoca Brands continues to expand its AI and blockchain initiatives, Zeroth provides us with an excellent strategic match, invaluable resources, and access to high-potential ventures and technologies.”
Tak Lo, the founder of Zeroth, commented: “I am very excited at the chance to work with Animoca Brands to scale up Zeroth. We believe that AI will be the biggest force multiplier for technology companies in the next five years, and our trajectory is rapidly establishing Zeroth as one of the world’s most active AI investors. The strategic and managerial skillsets of Animoca Brands will greatly increase Zeroth’s operational discipline and development opportunities as we expand efforts in the AI and blockchain industries.”
Zeroth is the world’s first accelerator program backing founders in frontier technologies like artificial intelligence and blockchain. Zeroth invests capital into visionary founders at the pre-seed and seed stage, and partners with them to advance their startups over an acceleration period of three months, utilizing Zeroth’s in-house team of experienced entrepreneurs, an extensive network of partners and investors, and a community of other founders who work on the problems that Zeroth companies are solving.
Zeroth SPC is a segregated portfolio company that maintains a series of segregated portfolios through which it makes early-stage investments in startups. Venture Classic Limited is the operational company of Zeroth SPC. In just over one and a half years, Zeroth has invested and worked with over 41 companies from 15 countries. Zeroth companies have attracted top venture capital investors such as Horizons Ventures, Archetype Ventures, and REAPRA, among others. For more information visit http://zeroth.ai/
List of companies accelerated by Zeroth
Botimize, Clickful, Clare.ai, Sero.ai, DT42, Aniwear, Object.ai, Rocco.ai, Impress, Mateverse, Fano Labs (Accosys), Automorph, Dishq, Emotics, Etymo, FamFit (OliveX), Foxsy, h30, Laboratik, Marax, Pingpad, Scry, SmartPeep, Volareo, Utu, WeCare, Tru Luv, Scribe Intelligence, Seoul Robotics, Planto, Fasal, MathCognify, Metrix.
Other Zeroth investments
Mainframe, Quadrant Protocol, Perlin Network, DREP Foundation, Libra Credit Network, Ocean protocol, Singularity Net, Raven Protocol
About Sun Hung Kai & Co. Limited
Sun Hung Kai & Co. Limited (HKG: 86) is an investment firm headquartered in Hong Kong. Since its foundation in 1969, the Group has owned and operated market-leading businesses in financial services. Leveraging on its heritage, experience and network, the Group aims to generate long-term capital growth for its shareholders through a diverse yet complementary portfolio of businesses and investments in multi-asset classes. It is the major shareholder of leading consumer finance firm United Asia Finance, and a substantial shareholder of Everbright Sun Hung Kai. The Group currently has about HK$40 billion in total assets.
About Animoca Brands
Animoca Brands (ASX: AB1) leverages gamification, blockchain, and artificial intelligence technologies to develop and publish a broad portfolio of mobile products including games such as The Sandbox, Crazy Kings, and Crazy Defense Heroes as well as products based on popular intellectual properties such as Garfield, Thomas & Friends™, Ever After High and Doraemon. Animoca Brands is the exclusive China distributor of CryptoKitties. The Company is based in Hong Kong, Canada, and Finland. For more information visit www.animocabrands.com or get updates by following Animoca Brands on Facebook, Twitter or Google +.
Source: Animoca Brands