Total consideration for the transaction is about US$1.08M, which consists of US$720K in cash earn-in and US$360K in Animoca Brands’s shares

Mobile games and subscription products company Animoca Brands Corporation has entered into an earn-in agreement with Tak Lo to acquire a 67 per cent stake in Venture Classic Limited, the operational company for his Artificial Intelligence and Machine Learning accelerator Zeroth SPC.

(Zeroth SPC is a segregated portfolio company that maintains a series of segregated portfolios through which it makes early-stage investments in startups. Zeroth SPC and Venture Classic are together known as Zeroth).

Total consideration for the transaction is approximately US$1.08 million, which consists of US$0.72 million in cash earn-in and approximately US$0.36 million in Animoca Brands’s 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.

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.

Separately, Hong Kong-based investment firm Sun Hung Kai & Co has 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 has previously invested in Animoca Brands.

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Founded by Lo, previously a Director at Techstars, Zeroth.ai is Asia’s first AI and ML-focused accelerator. It invests pre-seed capital in select high-potential startups and provides them with operational, strategic and networking support.

To date, Zeroth has accelerated three cohorts totalling 33 companies, obtaining an average 6 per cent stake in each, and has made eight investments in companies focused on blockchain technology. Several of them went on to raise follow-on funding, 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).

“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,” said Lo.

Animoca Brands leverages gamification, blockchain, and AI 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. The company is based in Hong Kong, Canada, and Finland.

Last December, Animoca Brands invested US$766,000) in cash in Zeroth.

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