The Sandbox raises $20M in convertible debt at $1B valuation for sandbox metaverse

The Sandbox, a user-generated content metaverse platform, has raised $20 million in convertible debt at a $1billion market valuation.

The Sandbox is a division of Web3 gaming company Animoca Brands, which views itself as advancing digital property rights for the open metaverse.

The strategic funding in the form of convertible promissory notes was led by Kingsway Capital and Animoca Brands, with participation by LG Tech Ventures and True Global Ventures. Noteholders have the ability to convert into equity of Bacasable Global Limited at the same terms as existing preference shares.

Yat Siu, executive chairman of Animoca Brands, said in a statement, “We are deeply honored by the continuing commitment to the vision of The Sandbox, and we’re incredibly excited about the future of composable user-generated content games.”

He added, “McKinsey estimated that by 2030 the metaverse could add $5 trillion to the global economy; today, games like Minecraft and Roblox are some of the most popular titles in the world, but they do notprovide their users with digital property rights. The Sandbox represents the evolution of UGCgames for the age of digital ownership.”

The new funding will be used to continue advancing The Sandbox’s vision of a decentralized virtual world where culture meets gaming and where the community is able to participate actively in, and derive benefit from, the growth of the whole ecosystem. It’s kind of like Roblox, with blockchain.

“If we can empower our economy and keep it growing, we can enable people to build their own experiences on their phones using Game Maker,” said Arthur Madrid, CEO of The Sandbox, in an interview with GamesBeat. “They can launch their experiences on virtual land and start monetizing.”

Madrid added, “With our investors, we share a vision of the metaverse. They also see Roblox is also finding ways to reach a new kind of immersive experience. We have a focus on Asia and there is a completely different view of the market there. Asia is a complete different place market when it comes to Web3.”

The company has 300 people, spread across places such as Paris, German, Los Angeles and Asia.

“We have leaned on our studios from around the world,” Madrid said. “It’s a known brand.”

As large as the staff is, The Sandbox is confident about its reserves. The Sandbox has sufficient capital to run the company for five years or more, said Sebastien Borget, president of The Sandbox, in an interview with GamesBeat. But the goal is to grow faster. To do that, The Sandbox has been adding more features to its gameplay system and other features on a quarterly basis, Borget said.

“We know that UGC is always getting better over time,” Borget said.

As part of this vision, The Sandbox will continue to improve earning opportunities for creators on its platform, including by: updating its Game Maker and VoxEdit 3D editor tools; introducing new social interactions and abilities for avatars; and expanding gameplay possibilities via its new multiplayer rules system, expected to launch in beta later this year and to the public in 2025.

Additionally, The Sandbox is developing a version of its decentralized metaverse for mobile devices, expected to launch in 2025.

The Sandbox, which opened to the public in its alpha version in November 2023, recently celebrated the milestone of 1,000 user-generated experiences live-published on its virtual map, with over 5.7 million users accounts connected to crypto wallets.

The main goal a few years ago was to keep growing the ownership of LAND and the investments that landowners made in The Sandbox. Now there are more than 50,000 visitors a month, and that number spikes when there are new seasons.

“We can create a different kind of economy, a different type of government and create a different place,” Madrid said.

“If landowners spend more time developing their claim, they have a chance to build its value,” Madrid said. “The value is not based on how long you hold your land for but how much content you create.”

The company started building years ago and it continues to establish ties in Asia, like a new partnership with LG, which is investing more in tech ventures. While building out the metaverse costs a lot of money, The Sandbox approaches it through such partnerships, Madrid said. One of the priorities in the past year is to stir up more UGC across many different territories around the world, he said. Back in March, The Sandbox said it had more than 1,000 UGC experiences.

As for a use for the money, “We keep doubling down on the product,” Madrid said.

The Sandbox sees itself as one of the leading mainstream applications onboarding new users to Web3, leveraging the power of fandom to drive new audiences to explore the metaverse. It has over 400 partnerships with global brands, including Lionsgate, Hellboy, Magnificent Century, Habbo, Space Invaders in Shibuya109, Notorious BIG, Warner Music, Ubisoft, Snoop Dogg, Gucci and hundreds of others. Over one hundred experiences featuring global brands are currently in production and planned for launch throughout 2024.

In the last 12 months, over 330,000 unique creators have downloaded The Sandbox’s no-code Game Maker, and The Sandbox is now ramping up its efforts to attract first-time creators through multiple initiatives including education efforts, bootcamps, and game jams.

To date, over 60,000 avatar NFTs have been sold and used to play in the virtual world of The Sandbox, including NFTs from 19 official branded collections such as Hellboy, Magnificent Century, Rabbids, MadBalls, Extraordinary Attorney Woo, Paris Hilton, Captain Tsubasa, Maradona, Elvis Presley, Cut The Rope, Habbo Hotel, Agoria, and others.

Madrid said, “The open metaverse empowers anyone to express themselves while discovering and engaging with the culture of millions of other users. Our mission at The Sandbox is to develop creative tools and technologies that bring fairness and new opportunities for all types of creators in the open metaverse in all aspects of culture, particularly games, music, fashion, art, sports, and entertainment.”

Borget said, “We’re excited to welcome new strategic partners who support our vision to develop the most accessible and inclusive platform that makes available the opportunities of Web3 to a global mainstream audience, and where brands and communities join hands to co-create the future of gaming and entertainment. The Sandbox is a proud believer in the power of the metaverse to shape our digital tomorrow to be collaborative, fair, and open.”

Anshul Agarwa, managing director at LG Technology Ventures, said in a statement, “Our mission at LG Tech Ventures is to bolster the visionaries who are shaping emerging trends, including Web3 adoption and consumer entertainment. The Sandbox’s distinctive approach to Web3 and gaming can unlock transformative opportunities for the global creators economy.”

Over the last six months, The Sandbox has passed various notable milestones, including enabling all of its more than 25,000 virtual real estate owners to publish their LAND experiences to the public; opening its Marketplace on Polygon’s L2, allowing creators to mint and sell their digital assets; and developing a thriving economy in which users have created more than 11,000 unique digital assets that have been minted and sold over half a million times.

The Sandbox ecosystem now boasts over 250 Trusted Partners, who are persons and agencies trained and certified by The Sandbox to assist brands and IP holders to build metaverse experiences for their fans. The number of Trusted Partners is expected to continue to grow as The Sandbox explores new markets in Vietnam, Saudi Arabia, and Africa, among others.