Binance Builds $500 Mln Crypto Fund Amid Bear Market

Binance, the world’s largest crypto exchange, said on Wednesday it closed a new $500 million investment fund.

The exchange said it will look into investing in blockchain, web3, and “value-building technologies” with the new fund.

The raising was conducted by Binance Labs, the exchange’s venture capital arm. Major backers for the fund include DST Global Partners, Breyer Capital, and Whampoa Group, with other investment houses acting as limited partners.

The fund will invest in companies across all stages of growth, including incubation, early-stage, and late-stage.

Binance labs has backed several major projects

Binance is no stranger to investing in crypto startups. The exchange’s venture capital arm has invested in several major upcoming crypto firms, including Axie Infinity, Polygon, Elrond, The Sandbox, and STEPN.

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 CEO Changpeng ‘CZ’ Zhao

But this has sometimes been to the company’s detriment. The company received over 3 million LUNA tokens for its investment in Terra, and had held $1.6 billion worth of LUNA at their price peak. 

The tokens are now at a fraction of their value. The exchange has also received flak for promoting UST on its platform.

Binance’s fundraising also comes during a troubled time for crypto markets, with a crash in May driving valuations to their lowest since early-2021. While markets are recovering slightly now, further price strength remains to be seen.

Still, Binance has recently ventured beyond crypto investments. The exchange committed $500 million in equity towards Elon Musk’s Twitter takeover.

Venture capitalists raise funds despite market crash

Binance isn’t alone in raising funds during the market crash. Crypto VC Andreessen Horowitz recently launched a $4.5 billion fund to capitalize on lower valuations caused by the recent crash.

In late-April, Dragonfly Capital lunched its biggest ever fund, valued at $650 million. This also comes after several other major funds raised crypto-focussed ventures earlier this year.

With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn’t trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns.
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