Binance affiliate launches $500 million crypto fund
Binance Labs, the venture capital arm of the world's largest cryptocurrency exchange, has launched a $500 million fund to invest in digital asset projects, a step to inject capital into an industry suffering from falling prices and the collapse of the stablecoin "terradollars". ".
The announcement comes after Andreessen Horowitz raised $4.5 billion for a crypto fund last week, the largest amount in the industry to date, bringing the total capacity of the digital asset-focused company, based in Silicon Valley, to $7.6 billion. The recent crash in the cryptocurrency markets has not deterred some venture capitalists who still see hope in the boom-bust industry.
“The best founders will come into this field and build the most viable projects,” said Ken Lee, CEO of Binance Labs.
The new fund was backed by institutional investors such as DST Global Partners and Breyer Capital, along with family offices and other companies. In an interview, Lee stated that the company will invest in Blockchain and Web3 projects via incubators, early stage projects, and late growth stage through a mixture of investments in tokens and stocks.
Alliance Labs has invested in crypto-based game developers like The Sandbox, STEPN, and Blockchain startup Aptos, and has invested $3 million In 2018, Terra, the blockchain technology behind Du Kwon’s Luna token, and the stablecoin algorithm Terradollar, which suffered a massive crash in May and inflicted heavy losses on investors.
At the time, Changping Zhao, co-founder and CEO of Binance, sought to distance his company from the failed project, tweeting, "Binance Labs has invested in hundreds of projects in the past four years and only a few have fallen by the wayside."
"(Terra) is both an awakening and a lesson for the industry," Lee added. Binance Labs' new fund is paying close attention to the crypto-token economy, and whether crypto projects have sustainable business models when making investments, according to Lee.
He stated that the current slowdown in the market has hurt the valuations of startup companies at later stages, but early stage projects have not been affected so far, adding that he is not concerned with the decline in innovation in the industry.
“If you go back to the previous cycle, a lot of people started crypto projects in the winter and they became popular in 2020 and eventually 2021,” Lee continued.
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