Special Report: NEOM, the huge, high-tech city state planned for northwest Saudi Arabia, has big dreams for the future. And web3 firm Animoca Brands is now very much a part of those plans.

The Hong Kong-based web3 gaming/open metaverse developer and venture capital company Animoca Brands recently announced a significant Strategic Partnership Memorandum of Understanding with Saudi Arabia’s NEOM Investment Fund.

It’s an eye-opening partnership that, once the financial aspect is sealed, would represent a total of US$50 million of capital injection into the web3 company.

And that will be in order to help further the Saudi Vision 2030 plan, with Animoca Brands providing web3 services and facilitating and driving various blockchain-based initiatives.


The finer financial details

Alongside the MoU strategic partnership, Animoca Brands and the NEOM Investment Fund have signed a Convertible Notes Financing Term Sheet.

Some US$25 million of the capital is earmarked for investment via the convertible notes at A$4.50 per share.

These notes, says Animoca Brands, have “substantively the same terms as the strategic funding round previously disclosed by Animoca Brands in a September 8 announcement last year” and their execution is “subject to a number of conditions precedent”.

The other half of the funding, meanwhile, will be used to buy the company’s shares on the secondary market.


Why the push into Saudi Arabia and into NEOM?

To learn a bit more about the partnership with NEOM and the company’s foray into Saudi Arabia, Stockhead had a quick chat with Animoca Brands Group President Evan Auyang this week. He told us:

“We have always been very interested in the NEOM region as a place to be involved. That’s partly because we have investors from all over and plenty of interest from the region, but also because the region is super interesting to us.

“It’s very avant garde and very interested in new technologies. Blockchain is absolutely a big part of their thinking. Saudi Arabia is a 36 million population country with about 60% under 30. And what’s even more staggering about that is, the gaming population is about two thirds of the total population.

“They even have a gaming minister, who we met at an esports tournament.” [Prince Faisal is president of the Saudi Esports Federation and is a member of Saudi Arabia’s ruling royal family.]

So they’re as keen on gaming as Animoca Brands is?

“Yes, and given what we do at Animoca Brands and given the big worldwide push into video gaming, it seemed like a natural relationship for us to cultivate. And NEOM is such an interesting place and idea – it’s the most innovative region in forward-thinking Saudi Arabia.

“They’re re-imagining living, planning a lot with virtual spaces and there’s a lot to be leveraged there using blockchain tech.”


Animoca Brands to help NEOM become a global tech hub

We asked Animoca Brands’ group president how the company will be specifically involved in NEOM. Auyang replied:

“It will absolutely involve gaming and metaverse applications, and we will be building a web3 hub there – helping to make NEOM a global tech hub.

“We’ll be helping the country and region bring in prominent web3 studios and ecosystem players to establish themselves there, which we believe will spur on the development of web3 and blockchain games within the region. Gaming is obviously a big part of our DNA at Animoca Brands.”

Focused on furthering digital property rights across the gaming and metaverse sectors, Animoca Brands, if you didn’t know, has its tentacles stretched right across the burgeoning web3 industry with a huge and growing investment portfolio of more than 400 companies, including Yuga Labs, Axie Infinity, Polygon, Fireblocks, OpenSea, Dapper Labs.

The company also develops and publishes a broad portfolio of products including original games such as The Sandbox, Phantom Galaxies, Wreck League, and Life Beyond.

While noting that nothing is finalised yet with its subsidiaries regarding the NEOM push, Auyang said that “we will bring the best of what we believe we can do in the region”, adding that the scope is also there to extend out beyond gaming and metaverse within NEOM, with other forms of blockchain engagement.


So, what is NEOM?

The word NEOM is formed from the Greek word for “new” and the Arabic term for “future”.

The region pitches itself as “an accelerator of human progress and a vision of what a New Future might look like”.

A vast Belgium-sized area of northwest Saudi Arabia on the Red Sea, it’s being built from the ground up as a “living laboratory” – a place where entrepreneurship and innovation are encouraged and supported.

Part of NEOM’s vision is to include ground-breaking new tech, including web3 enterprises, in hyperconnected, cognitive cities, ports, research centres, sports and entertainment venues and tourist destinations.

The NEOM Investment Fund (NIF) meanwhile, is the official strategic investment arm of NEOM, designed to activate, advance, and accelerate the global transformational changes deemed critical by many to a sustainable future.

Its core activities include executing investments alongside NEOM’s various sectors and subsidiary companies, with the aim of helping to pioneer growth companies and next-generation industries, and fundraising broadly at the project level.

NIF notes that it is actively seeking out and advocating for setting up large anchor businesses in Animoca Brands, along with “moonshot” tech investments that have the potential “to deliver sustainable long-term prosperity at a time when the world faces challenges of unprecedented scale and complexity”.


‘The emergence of a new meta-nation’ 

The CEO of NEOM Investment Fund, Majid Mufti, expressed his enthusiasm for both the partnership itself and web3 as a tech sector:

“We are excited to partner with Animoca Brands to support the development of NEOM’s digital infrastructure.

“Web3 technology and infrastructure development will not only be an important foundation of NEOM’s tech stack and architecture, but also has potential to revolutionise global industries.

“By partnering with a market-leading company like Animoca Brands, we hope to accelerate web3 technology development and adoption.”

Animoca Brands executive chairman and co-founder Yat Siu added:

“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.

“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 the blockchain.”


This article was developed in collaboration with Animoca Brands, a Stockhead advertiser at the time of publishing.  

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.