Binance, one of the world’s largest cryptocurrency exchanges, has revealed plans to launch a $1 billion venture capital fund to help develop blockchain and cryptocurrency startups. In terms of daily trading volume Binance is currently the world’s largest cryptocurrency exchange. The fund will use Binance’s BNB tokens to invest in these companies and is seeking “20 qualified partners” to join. The press release from Binance states, “Eligible fund partners should be long-term investors who have faith in cryptocurrency and blockchain, and have asset-under-management of more than US$100 million. Applicants need to prove their fund size, and submit introduction of their team members and investment portfolios to be considered by Binance Lab as a partner.” Binance is currently headquartered in Hong Kong with plans to relocate to Malta after Japanese regulators cracked down on cryptocurrency exchanges in the country earlier this year.
The venture capital fund’s first investment will be a blockchain ride hailing startup founded by the CEO of Funcity and founder of Chinese ride-hailing comapny Kuaidi Dache. The ride hailing company has been referred to as a blockchain version of Uber. The company recently merged with Didi Chuxing, a $60 billion firm.
Binace expects to fund these investments in 10 phases of $100 million investments that will create a combination of “fund of funds”. This essentially means that they will create a fund that invests in other funds and then they will also create a separate direct fund to invest directly in blockchain initiatives. The fund will be called a “Social Impact Fund”.
Coinbase, another leading cryptocurrency exchange also announced this year their plans to create a venture capital fund for blockchain startups. Coinbase announced their plans stating, “We’re going to invest off our balance sheet into crypto companies. We will invest in companies that are in the space and are aligned with our values.”