No Funding Blues? Binance Next to Accelerate Web3 Investments With $500M Fund

The venture capital arm of Binance has announced that it raised $500 million for a new Web3-focused investment fund.

Binance Labs said in a recent release that leading global institutional investors such as DST Global Partners, Breyer Capital, and Whampoa Group supported the fund. Meanwhile, other major private equity funds, family offices, and corporations also subscribed to the fund as limited partners, the press release noted.

Web3 funds aim to accelerate adoption

The half a billion-dollar fund aims to invest in crypto projects that could drive the adoption of Web3.

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 with the potential to build and to lead Web3 across DeFi, NFTs, gaming, Metaverse, social, and more.”

Binance’s new fund follows Venture Capital firm Andreessen Horowitz’s launch of a $4.5 billion Web3 fund. Capitalizing on the market downturn, a16z allocated approximately $1.5 billion of the fund for seed investments and around $3 billion to venture investments.

Meanwhile, Binance Labs has noted that it will make investments across three different stages of incubation, early-stage venture, and late-stage growth. And so far, the company has reportedly invested in close to 100 projects such as 1inch, Axie Infinity, Dune Analytics, Polygon, Optimism, The Sandbox, etc.

.@BinanceLabs acts as a strategic partner, not just an investor.

The goal is simple – find promising builders and give them the capital and holistic support to fuel their growth.

— Binance (@binance) June 1, 2022

That said, Binance’s announcement also comes at a time when market recovery hasn’t been sustainable. At press time, the global cryptocurrency market cap fell to $1.29 trillion, with Bitcoin once again trading under $30,000.

Is the market downturn beating funding blues?

Ken Li, an executive director at Binance Labs told Bloomberg, “The best founders will still come into the space and build the most meaningful projects,”

However, recent reports have noted that there is a slight dip in funding when compared to the last year. Morgan Stanley noted that crypto infused funding of $30 billion in 2021.

In May, according to Dove Metrics data, the total VC funding in crypto plunged by 38% from $6.83 billion in April to $4.22 billion. Furthermore, the banking giant predicts VC investments will slow down for the remainder of the year in a supposedly broader funding winter.

But, despite the ‘funding winter’ that media reports have underlined, VCs have turned to emerging technologies like Web3. Per Stan Miroshnik, partner and co-founder of 10T Holdings, “For investors like us, it’s time to buy. Valuations have come in and great companies are now available at a more reasonable price.”