The world’s largest crypto exchange by trading volume has announced the establishment of its venture capital fund. Binance Labs, the venture capital arm of the exchange platform, has received $500 million to establish a fund to invest in Web3 and blockchain firms.
Binance Labs revealed that it secured $500 million for its first start-up fund with the help of DST Global, Breyer Capital, and other family offices and organisations. It intends to invest its recently raised funds in Web3 projects. Web3 is a new version of the web, regarded by some as “the future of the internet.”
Binance Labs’ $500M investment fund for web3. Image: Binance
High-profile investment groups, such as Silver Lake and SoftBank, also poured capital into blockchain and Web3 amid the excitement around cryptocurrencies.
According to CEO Changpeng “CZ” Zhao, the newly closed investment fund seeks to identify and assist projects and creators with the potential to create and lead Web3 across Defi, NFTs, gaming, the Metaverse, and more. The fund will invest in three phases: incubation, early-stage venture, and late-stage growth.
Besides, the corporation intends to purchase a $500 million stake in Twitter to support Elon Musk’s ambition to acquire the company to “bring social media and Web3 together.”
In the aftermath of falling stock prices and the meltdown of stablecoin TerraUSD, Binance’s investment efforts signal a possible turning point in the crypto space, as many firms seek the next significant breakthrough.
It follows the announcement by Andreessen Horowitz last week of an enormous $4.5 billion fund to invest in crypto start-up companies.
The company’s venture capital arm uses the recent decline in digital assets to identify entrepreneurs working on the next big thing in technology. The fund will focus on pre-seed, early-stage, and growth equities and invest in tokens and shares.
According to Ken Li, executive director of investments and M&A of Binance Labs, the company is seeking projects with the potential to contribute to the expansion of the Web3 ecosystem. Such endeavours include infrastructure, NFTs, and DAOs. Binance thinks that there are between 300,000 and 500,000 active Web3 developers now, a figure it intends to “significantly” increase.
The corporation made several equity investments in the last year. This is the first time the corporation has officially established an outside-funded venture capital fund.