Virtual currency venture capital firm Animoca Brands has announced that it will be interested in raising $1 billion for its Web3 fund, says a Bloomberg report.

The fund, dubbed Animoca Capital, has been touted to support creators and builders in the Web3 industry with a special focus on decentralized finance (DeFi), the metaverse, and non-fungible tokens (NFTs). However, the amount raided is a far cry from the 2022 announcement in which Animoca Brands noted that it planned to raise up to $3 billion.

Animoca Brands’ declining numbers have been attributed to the dire conditions the digital asset market has faced in recent months. Yat Siu, the firm’s co-founder, told Bloomberg that “it’s fair to say it’s a challenging market,” marked by more downs than ups for investors.

“Because our revenue is based on tokens, overall revenue on fiat terms will also be affected,” Siu said.

Animoca Brands has become one of the largest players in the industry, with investments in more than 300 start-ups. Despite rapidly declining asset values, Animoca Brands subsidiaries continued to raise capital, betting on the remaining institutional interest in virtual currencies.

Animoca Brands’ financial position has drawn attention after the company failed to file its annual accounts for 2020, which the company says it received permission to delay filing. However, lingering issues remain such as the delisting of the company from the Australian Stock Exchange, the payment of fines to regulators for late filing and the firing of chief auditor Grant Thornton.

The prospects for 2023

Experts are already predicting a slow year for digital assets, given the grim nature of macroeconomic conditions and the failures experienced by large venture capital firms in the sector. Aside from macroeconomic conditions, analysts point to the spate of incoming regulations as evidence that institutional investors are choosing to stay on the sidelines to get a clearer picture before sinking funds.

However, it is expected that builders working on innovative use cases for blockchain technology can expect an inflow of funds from investors, given the historical record of extended bear markets.

“Therefore, we expect the development and implementation of blockchain technology to accelerate over the next 12 months as one of the many investments companies make to increase efficiencies,” reads a Franklin Templeton paper.

Overall, NFTs have been predicted to receive the lowest interest for VC funds, while the metaverse appears to have piqued interest from retail and institutional investors.

See: Blockchain Venture Investing: Powering Utility for a Better World

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