Binance, the world’s largest cryptocurrency exchange, is soon launching its own venture capital fund. On 1st June, the firm’s venture arm, Binance Labs, said it has raised $500 million for its debut start-up fund. Leading venture capital firms DST Global and Breyer Capital and a few others have lent their support.
As per sources, Binance Labs intends to use the capital to invest in firms building “Web3.” The launch of Binance’s new fund comes amidst a testing time when Bitcoin [BTC] and other digital currencies are on a prolonged downtrend.
The world’s dominant crypto asset BTC has shed more than 50% since reaching an all-time high of nearly $69,000 last November. That has dented publicly-listed crypto companies like Coinbase, whose shares have plunged 69% since the start of 2022.
On top of that, investors and traders fear that the market-wide slump will feed through to privately-held crypto start-ups. But that has hardly made any impact.
Binance unfazed by the current market drawdown
While start-up valuations of $1 billion or more are “slowing down a bit,” there’s “no current impact in early-stage private markets,” Ken Li, Binance Labs’ executive director of investments and M&A, told CNBC.
Capitalizing on the current dip in the digital assets market, Binance Labs is hoping to find founders building what it sees as the next big thing in tech. Its bets will be divided into pre-seed, early-stage, and growth equity, and the fund will invest in tokens as well as shares.
“We are looking for projects with the potential to drive the growth of the Web3 ecosystem,” Li said. Such projects may include infrastructure, nonfungible tokens, and decentralized autonomous organizations. Binance estimates there are currently around 300,000 to 500,000 active Web3 developers, a number it hopes to grow “substantially.”
Last year, the trading platform has made a series of high-profile equity investments. But this is the first time the firm has formally raised a VC fund with financing from external investors.
The latest development also comes after Andreessen Horowitz last week announced a massive $4.5 billion fund to invest in crypto start-ups. Partner Ariana Simpson called Bear markets the best opportunities to come about.
