Binance's VC arm raises $500 million fund — its first with outside capital

Binance Labs, the venture capital and incubation arm of crypto exchange Binance, has raised a new $500 million fund to back web3 projects.

Backers of the fund include DST Global Partners, Breyer Capital and unnamed private equity funds, family offices and corporations as limited partners, Binance Labs announced today. This is the firm's first fund with outside capital, a Binance spokesperson told The Block.

Binance Labs' new fund is a sign of confidence among crypto-focused venture capital firms, even as crypto prices sag. Last week, Andreessen Horowitz (a16z) unveiled a $4.5 billion crypto fund, the industry’s large to date. Two former Binance executives — Ling Zhang and Wayne Fu — also revealed a $100 million fund named Old Fashion Research.

Binance Labs was formed in 2018 to invest Binance's own money. The firm has funded more than 100 startups to date, including Axie Infinity developer Sky Mavis, move-to-earn startup StepN, decentralized exchange aggregator 1inch, and blockchain audit firm CertiK.

With the new fund, Binance Labs will continue to back startups focused on increasing crypto adoption. The firm is looking to invest in projects across three stages: incubation, early-stage development and late-stage growth.

Binance Labs also runs an incubation program for early stage companies and is currently supporting its fourth cohort of 14 startups. For early-stage investments, the firm plans to back both token and equity rounds.

For later-stage investments, Binance Labs is planning to back web3 startups that are looking to integrate into Binance's ecosystem.

“In a web3 environment, the connection between values, people and economies is essential, and if these three elements come together to build an ecosystem, that will accelerate the mass adoption of the blockchain technology and crypto," Changpeng Zhao, founder and CEO of Binance, said in a statement. "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."