The venture arm of Binance has announced that it has raised $500 million for a new investment fund focused on Web3.
Binance Labs said in a recent release that leading global institutional investors such as DST Global Partners, Breyer Capital and Whampoa Group have supported the fund. Meanwhile, other large private equity funds, family offices and corporations also signed up to participate in the fund as limited partners, the press release said.
Web3 funds aim to accelerate adoption
This half-billion dollar fund aims to invest in crypto projects that can drive Web3 adoption.
Binance Founder and CEO Changpeng Zhao ‘CZ’ said in a blog post, “The goal of the newly closed investment fund is to discover and support projects and founders that have the potential to build and lead Web3 on DeFi, NFTs, gaming, Metaverse, social, and more. ”
Binance’s new fund follows the launch of a $4.5 billion Web3 fund by venture capital firm Andreessen Horowitz. Taking advantage of the market downturn, a16z has allocated approximately $1.5 billion of funds to seed investments and about $3 billion to venture investments.
Meanwhile, Binance Labs has noted that it will invest in three different phases of incubation, early-stage venture, and late-stage growth. And so far, the company is reported to have invested in nearly 100 projects like 1inch, Axie Infinity, Dune Analytics, Polygon, Optimism, The Sandbox, and more.
That said, Binance’s announcement also comes at a time when the market rally isn’t sustainable. At press time, the global crypto market cap has dropped to $1.29 trillion, with Bitcoin once again trading below $30,000.
Does a market downturn beat funding?
Ken Li, managing director at Binance Labs told Bloomberg, “The best founders will still enter the space and build the most meaningful projects.”
However, recent reports have noted that there was a slight decrease in funding compared to last year. Morgan Stanley notes that crypto has poured $30 billion in capital in 2021.
In May, according to Dove Metrics data, total VC investment in crypto fell 38% from $6.83 billion in April to $4.22 billion. Furthermore, the banking giant predicts VC investments will slow for the rest of the year in what is supposed to be a broader funding winter.
However, despite the ‘funding winter’ that media reports highlight, VCs have turned to emerging technologies such as Web3. Per Stan Miroshnik, partner and co-founder of 10T Holdings, “For investors like us, it’s time to buy. The pricing has been put in place and the big companies are now available at a more reasonable price.”