Bill Qian, the former global head of fundraising of Binance Labs, the venture capital arm of Binance exchange, is seeking to raise over $100 million for a crypto venture capital fund that he recently established.

Qian, who departed from Binance in June last year, currently serves as the chairman of his Dubai-based venture capital fund Cipher Capital.

According to Bloomberg media, Qian wants to invest more than $100 million in Web3 startups. His crypto venture capital fund is looking to invest only in the firms that can deliver Web3 mass adoption. Qian is looking to deploy funds to firms that can bring the most internet users to Web3.

Based on his plan, he wants to approach Asian technology tycoons to invest capital into his venture capital fund.

As per official documentation, Cypher Capital has invested a range of $250,000 and $1 million in several forward-thinking firms. The company operates in Dubai, a city making efforts to become a crypto hub.

Why venture funds pour money into web3 businesses  

After the fall of the once second-largest cryptocurrency exchange FTX, crypto transactions hit new lows, and major Web3 companies collapsed due to fear that gripped the market.

However, 2023 has brought more hope for crypto investors as the broad market has recovered from its lows. As a result, VCs have shown renewed interest in deploying funds in Web3 companies as mass adoption of Web3 is their ultimate objective.

While Web3 is one area where investors have deployed a lot of funds over the last six months, VC funding has been moving away from centralized crypto services into decentralized platforms.

Such decentralized services include blockchain-based technologies such as the Metaverse, play-to-earn games, and many more.

Last year, VCs investing in centralized platforms (such as exchanges, custodial wallets, and crypto on-ramps) dropped by about 85% due to the failure of several centralized companies like Celsius Network, BlockFi, FTX, and others.

In the third quarter of last year, VCs invested about $1.5 billion into Web3 firms. Of course, venture capitalists are pouringmoney into web3 because they are convinced that the token economies underpinning several web3 projects can generate more massive returns than Web2 investments. This is particularly true in the current climate of increased market volatility, interest rate hikes, surging inflation, and startup valuation markdowns.

Last December, PtichBook, a venture capital company, predicted that by 2027 Web3-based content platforms would generate an estimated $39 billion in revenue, compared to the $3.4 billion earned by the end of last year.

While venture investments remain low into 2023, they may begin to increase again in the second half of the year.

Nicholas Otieno

CBW - External Analyst

KENYA