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Binance Ventures: More focus on established startups with existing products and revenue, founder's identity also crucial

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Binance Ventures: More focus on established startups with existing products and revenue, founder

Bloomberg interviewed the venture capital departments of exchanges Kraken, Coinbase, and Binance, who mentioned the reduction in venture capital investing with casual remarks. Binance noted a change in their investment criteria: "We are more focused on supporting startups that already have real products and revenue, rather than just a name."

Third Quarter Sees 60% Reduction in Crypto Venture Capital Risks

Compared to Q3 of 2021, the total venture capital amount has decreased by 63% to $2 billion.

PitchBook analyst Robert Le pointed out that many venture capital departments have experienced more severe cutbacks:

They are more cautious, turning to smaller investments as all industry participants aim to preserve more cash and focus on core business.

Coinbase: Investing More in Non-US Projects

Coinbase Ventures' Director of Venture Capital, Hoolie Tejwani, stated that Coinbase's investment direction has shifted, now supporting more startups outside the US.

I see many projects with great ideas, but these founders have told me, "I have to exclude the US from my business plan and no longer serve US users." This is very regrettable to me.

However, Hoolie Tejwani also emphasized that he sees investment potential in countries like India, Australia, the UK, and Singapore.

Kraken: Preparing for a $100 Million New Fund

Brandon Gath, Managing Partner at Kraken Ventures, pointed out that Kraken typically completes 3 to 4 transactions per quarter, a target achieved in Q3 of this year as well.

The global distribution of startups invested in by Kraken is approximately:

  • US: 40%
  • Europe: 40%
  • Other regions: 20%

Kraken Ventures is currently raising a new $100 million fund, planning to invest in areas beyond the cryptocurrency industry.

Binance Labs by Binance

Dana Hou, Head of Operations at Binance Labs, mentioned changes in their investment criteria:

Binance Labs and other venture capital institutions are now more focused on supporting startups with actual products and revenue, rather than just a reputation. Investigating the true identity and background of the founders is also crucial.

This seems to be in response to Binance's past investment in FTX as well.