Why did Jack Ma’s Blue Pool Capital bet on NFT when investing in a blockchain project for the first time?

"Blockchain Daily" (Shanghai, reporter Zhang Yangyang) In March this year, Christie's auction house sold the digital work of artist Beeple for nearly $70 million, which quickly made the entire NFT popular. Recently, a large number of NFT concept projects announced that they had received huge financing, and many traditional investment institutions rushed to bet on them.

Last week, blockchain game and NFT developer Animoca Brands announced that it had received a new round of $50 million in financing. Officials said that with the completion of this round of financing, the company's total financing has reached $139 million, with a pre-investment valuation of $1 billion.

The reporter of Blockchain Daily noticed that in addition to crypto industry giants such as Coinbase, the investors this time also included a low-key and mysterious institution - Blue Pool Capital, the family wealth management fund of Jack Ma and Joseph Tsai.

This means that Jack Ma and Joseph Tsai have officially invested in the blockchain project. The former has previously emphasized that "people will die without blockchain."

Jack Ma's first foray into blockchain project

In 2014, after Alibaba went public in the United States, its core founders Jack Ma and Joseph Tsai jointly established a family office in Hong Kong. The main body is Blue Pool Capital, which is responsible for managing the huge family wealth. It is mainly committed to long-term investment and holds License No. 9 (Asset Management Category) issued by the Hong Kong Securities and Futures Commission.

According to a previous report by Caixin Media, Blue Pool Capital manages part of Jack Ma's wealth and most of Joseph Tsai's own $8 billion fortune.

According to a report by the Wall Street Journal in 2015, Blue Pool Capital's main investment areas are hedge funds, healthcare, artificial intelligence, big data cloud computing and other fields. Tianyancha data shows that since its establishment, Blue Pool Capital has disclosed a total of 8 investment transactions.

From the perspective of investment industries, healthcare has always been a track with heavy holdings. Among the eight companies it has invested in, five are in the healthcare industry, including two pharmaceutical companies, two biotech companies, and one disease diagnosis company. The other three companies are Internet consumer projects.

The reporter of Blockchain Daily noticed that the above investments were mostly concentrated in the period from 2016 to 2018. Since then, there have been few investment events disclosed about Blue Pool Capital.

The investment in Animoca Brands is Blue Pool Capital’s second publicly disclosed investment event this year after a lapse of nearly three years. It is also its first foray into the blockchain field.

A reporter from Blockchain Daily called the official website of Blue Pool Capital, and the person who answered the phone said that he was not clear about the details. The reporter also wrote to Blue Pool Capital, but as of press time, no further response was received.

“Without blockchain, people will die”

As the most mysterious and complex part of the financial industry, every move of the family office is quite eye-catching. If we go back to Jack Ma himself, there are actually traces of his betting on the blockchain field.

At the 2020 Online China International Intelligent Industry Expo, Jack Ma commented on blockchain in a video speech: "Today, many places are labeled with blockchain, but in fact they have little to do with real blockchain. Blockchain is a solution for data privacy and data security. Today's Bitcoin may be a bubble, but blockchain is definitely not a bubble."

Also in 2020, when Jack Ma first appeared in a live broadcast room as a Taobao anchor, he mentioned that intellectual property rights must be protected in a new way. He believed that blockchain technology is solving this problem, and people who lack intellectual property awareness should pay attention to it as soon as possible. Interestingly, during the live broadcast, Jack Ma also did not forget to "promote" Alibaba's Ant Chain.

Going back further, at the Second World Intelligence Conference in 2018, Jack Ma also expressed that he was very optimistic about blockchain. "We invested in blockchain because Alibaba has no other choice. Others' online information dissemination, including social media, does not require blockchain. We are engaged in Internet finance, and our transaction volume on Alibaba's trading platform is trillions and tens of trillions. Without blockchain, we will die."

On July 23, 2020, Ant Group held a new brand launch conference for Ant Chain. Ant Blockchain was officially upgraded to "Ant Chain", and it was promoted that blockchain would change production and life like mobile payments.

Just a week before Blue Pool Capital invested in Animoca Brands, Alipay just released two NFT payment code skins on the "Ant Chain Fans Grain" applet.

Why does Blue Pool Capital bet on NFT?

Back to the investment target Animoca Brands itself, it is a game developer focusing on NFT, aiming to provide players with digital property rights using blockchain-based in-game token rewards.

According to the official website, Animoca Brands is headquartered in New Hong Kong and is a subsidiary of Animoca. It was founded by Hong Kong's famous technology entrepreneur Xiao Yi in 2014. In early 2015, Animoca Brands successfully went public through a backdoor listing by acquiring Black Fire Mineral, a listed company on the Australian Stock Exchange (ASX). However, due to management problems, participation in cryptocurrency-related activities and other illegal operations, it was eventually delisted from the Australian Stock Exchange in March 2020.

Although the prices of cryptocurrencies such as Bitcoin have fallen sharply recently due to multiple regulatory factors, this has not affected investors' enthusiasm for investing in the cryptocurrency and blockchain fields.

In addition to Blue Pool Capital, Animoca Brands also received $50 million in financing from Coinbase Ventures, Liberty City Ventures and Samsung Venture Investment.

The company said in a statement that with the completion of this financing, the company's total financing has reached US$139 million, with a pre-investment valuation of US$1 billion. The funds raised this time will be used for strategic capital investment and acquisitions, product development and intellectual property licensing.

Back to Blue Pool Capital, why was its first blockchain investment an NFT project?

NFT based on blockchain technology, due to its irreplaceable and indivisible characteristics, naturally meets the needs of asset confirmation and property rights protection. To a certain extent, it is consistent with the concepts of data security, privacy credit, intellectual property rights, etc. that Jack Ma has previously emphasized.

Li Lianxuan, chief researcher of OKLink, said in an interview with a reporter from Blockchain Daily that NFT, due to its irreplaceable and indivisible characteristics, naturally meets the needs of asset confirmation and property rights protection. At the same time, NFT works in the digital economy era provide unique property rights certificates for the works of creators, effectively protecting the copyright of creators; convenient and fast transferability allows these works to be sold at the most appropriate price, stimulating creative enthusiasm.

So far this year, despite the ups and downs of the crypto market, NFT is still a "small spring" in the crypto field, and continues to be popular in industries such as sports, games, and music, and various traditional institutions and people have entered the market. In the first quarter of this year alone, NFT sales exceeded US$2 billion, an increase of at least 20 times from the previous month.

However, Li Lianxuan also said that despite this, it is still necessary to emphasize that the current NFT market has already seen an obvious bubble. NFT participants should participate and invest cautiously.