Hong Kong-based venture capital firm and blockchain gaming developer Animoca Brands has reportedly cut its metaverse fund by 20%.
The decision to reduce the capital comes during a time of uncertainty and volatility in the crypto sector.
The firm previously announced its plans for a new Animoca Capital fund with a target of $2bn focused on investing in metaverse businesses, digital property rights and providing opportunities to access web3 firms.
However, the $2bn target was halved to $1bn in January and has now been reduced to $800m, according to Reuters.
As of July last year, Animoca Brands was valued at around $6bn after raising $100m in a funding round led by Singapore-based investment firm Temasek.
The funds were said to be deployed for product development, strategic acquisitions, securing licenses for intellectual properties, advancing the metaverse, and more.
Now, the company has seen its shares trade at a lower valuation in secondary markets with its market capitalization slipping below $2bn.
The significant decline in the firm's valuation and decreased metaverse fundraising target illustrate an ongoing shift in the stability of the crypto sector.
Following the collapse of FTX, a demise that caused a ripple effect of bankruptcy among several crypto lenders, cybercrime has increased and many firms have become cautious when considering investments in the industry.
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