Who needs VC? The largest companies in the cryptic world are continuing to build the ecosystem through their own aggressive investments, as expected at the start of this year.
Binance, the largest stock exchange in the world, is the last example. The company is marching over a gigantic $ 1 billion fund that has unveiled at the start of this year after announcing an incubation program focusing on the breeding of early blockchain startups.
The Binance Labs incubation program was discontinued in June when the company announced its fund, but now the company has lifted the burden and provided further details – the company is very aggressive.
The program will take about 8-10 companies per lot for a period of 10 weeks, Binance Labs CEO Ella Zhang told TechCrunch in an interview, adding that the goal is to maintain a program per quarter.
That frequency is unheard of, even by those who do full-time incubators, but there's more. Binance Labs will distribute $ 500,000 to each program participant in exchange for a 10 percent share of the business. Again, this is a big effort compared to most other programs, although it is worth noting that Binance has not decided if that investment will be in fiat, crypto or a combination of both.
Besides the money, the company wants to open up and allow participants to access the benefits of being the best encrypted exchange in the world. This will include mentoring, technical advice, access to the Binance network and also support for the construction of non-technical organizations such as human resources, administration and others.
The inaugural program will be held in San Francisco from October 9th – applications for participation is open until September 14th. As is normal, the program will end with a demonstration day – the "BUIDLer Day" – which will see the presentations launch to an audience of investors, media and other industry figures.
Zhang explained that the focus on startups for the program is similar to the Binance fund. This, he said, includes infrastructure focused on projects, public chain scalability, security, decentralized trading, portfolio, custody, payment, coin stability, compliance, decentralized apps, games, virtual goods and more.
Ideal candidates have not made any investments yet since Binance intends to be the first check, said Zhang – who joined the crypto-venture in May and was previously director of investment with KPCB China.
Next, Binance aims to manage the program in different parts of the world each time to address what it sees as global opportunities for blockchain businesses.
"We are looking at different cities around the world because blockchain and crypto are international." We see problems and opportunities in different regions with different ways of exploiting the blockchain, "Zhang said. He added that Africa and Asia are of particular interest at this point, but no other destination has yet been decided.
Zhang and Binance Labs Director Christy Choi explained that the large equity check is designed to "facilitate" startup founders allowing them to focus on developing a product or service, rather than having to create a business.
With this in mind, the $ 500,000 investment will cover the flights, accommodation and living costs associated with the incubator program and provide the capital to obtain a product from the ground and towards the deployment. The program will maintain close ties with the Binance fund, which is also managed by the Zhang & # 39; s Binance Labs division, so there will be subsequent investment opportunities once the lot is completed and how the companies will scale.
"Binance Labs has started making investments in recent months and we have seen a lot of market clamor that is distracting many founders from launching and delivering because there is a huge demand by investors to enter their project, "said Zhang. "They need a lot of help to become a more mature team and society to shape what they want."
Unlike traditional companies that invest private investors for capital to start and then as they grow, blockchains and cryptographic projects typically jump quickly into ICOs. Although often lucrative, the process can let them deal with retail investor expectations and concerns about legality and other areas, which steal all resources from the actual construction of the business itself. Zhang believes the Binance program will help the founders "get rid of those noises and focus on their products".
Binance's aggressive investment strategy makes perfect sense. Being the world's largest encrypted volume exchange – with over $ 1 billion trading in the last 24 hours at the time of writing – it is practically the currency to be printed, but it is entirely dependent on the crypto industry.
Binance made a profit in the region of $ 450 – $ 500 million (dependent on token prices) from its first year of operation – according to company data, which uses 20% of the quarterly profits to buy back and "burn" "the BNB token – but it will always be a reflection on the crypto industry, and therefore needs it to be healthy.
This acquired interest means that we must ensure that there are significant blockchain and crypto societies in the world. This explains in some ways why it is offering a whopping $ 500,000 per participant and a massive $ 1 billion fund, which will be used to invest in funds and direct investments in startups.
Zhang has acknowledged the situation to his credit, saying that the real cases of use for blockchain and crypto are what will make Binance prosper. "The incubator and the fund are intended to identify those cases and make them able to thrive, the question is whether Binance can find enough of what he is looking for.
Note: the author owns a small amount cryptocurrency: Enough to get an understanding, not enough to change a life.