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Animoca Brands has agreed to acquire Quidd, a maker of a digital collectible marketplace with 6.8 million unique users. The purchase price is as much as $8 million. The move is part of Animoca Brands‘ long-term effort to marry blockchain technology — the transparent and secure digital ledger — with sellable digital merchandise such as collectible characters.

By adding blockchain, Animoca Brands will be able to uniquely identify digital items, enabling true digital ownership for users and guaranteeing item rarity.

“Blockchain is certainly one of our main strategies and we are always investigating such opportunities, but we have not yet made any announcements on this particular subject,” said Yat Siu, cofounder and chairman of Animoca Brands, in an email to GamesBeat. “We believe powerfully in digital collectibles and their ability to generate value, appeal, and technology adoption. This is illustrated by our NFT strategy — perhaps most famously by our F1 NFT, the 1-1-1, which broke records for branded digital collectibles.”

The New York-based Quidd claims it has the world’s largest assortment of digital collectibles licenses and partnerships (with over 325 brands) featuring the world’s top content owners across multiple verticals — partners include Disney, Marvel, HBO (Game of Thrones), CBS (Star Trek) and NBA, among others.

To date, Quidd has issued over 2.1 billion individually serialized digital collectibles to 6.8 million unique users, and it had an average of 208,000 monthly active users for the first half of 2019. It facilitates around six transactions per second for branded goods. But it has a lot of room to grow outside of North America. Quidd’s founders are veterans of Topps, a leader in the sports memorabilia and collectibles industry (and baseball cards).

“The Quidd business therefore synergizes powerfully with our goal to leverage the power of popular brands and true digital ownership,” Siu said. “We see a lot of commercial potential in Quidd, which has generated $10 million in revenue from the sale of branded collectibles, primarily in North America and available in English language only.”

The Hong Kong-based Animoca Brands said the deal significantly increases its economic potential in the digital collectibles sector through digital licensing arrangements with premier content owners.

“Here at Animoca Brands, we are incredibly excited to welcome the highly talented team behind Quidd, who will assist us in the execution of our vision for branded digital collectibles,” said Siu in a statement. “Our brand portfolio will grow substantially through this acquisition, and we look forward to working with even more of the world’s most powerful intellectual properties such as Marvel, Game of Thrones, Star Trek, the NBA, and many others.”

Under the deal, it will pay $5 million upfront to buy Quidd, and then pay $3 million based on hitting profit goals.

Animoca Brands completed a strategic capital raise of A$8 million Australian dollars, or $5.4 million in U.S. currency, at 20 Australian cents per share.

Started in 2016 by Michael Bramlage and Erich Wood, the Quidd marketplace, catalog, and collections are available to users via the Quidd mobile application, or app, available free of charge on iOS and Android devices. Quidd raised $10 million and its largest investor is Sequoia Capital.

The deal is subject to shareholder approval.

“From the beginning, we’ve held a strong conviction that digital collecting would contribute meaningfully to the $15 billion physical collectibles industry,” said Bramlage, CEO of Quidd, in a statement. “By joining the Animoca Brands family, we will accelerate our mission to bring Quidd’s inimitable catalog of digital collectibles to a global audience and to enable true digital ownership for millions of mainstream digital collectors.”

Quidd has around 15 employees, while Animoca Brands has about 200.

“Something else that we really like is that Quidd collectibles are owned by end-users in perpetuity, even if a brand license terminates,” Siu said. “This is an important step toward achieving true digital ownership.”

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