As crypto and blockchain businesses flourished, the nascent industry becomes a sweet spot for a lot of tech venture capitalists (VC). But the recent drop in crypto prices and some bearish commentary about the future has forced most venture capitalist to take a cautious approach towards deployment of funds into the industry which is becoming more uncertain. However, that’s not been the case Binance Incubator which is pretty confident on the cryptocurrency and continues to grow despite the market meltdown.
Binance feels valuations are reasonable for a private investment
Binance Labs, the incubator vertical of Binance cryptocurrency exchange, seems to have remained unfazed by the recent market meltdown. While other incubators are holding the “pause” button on the investment in the crypto industry which currently full of uncertainty, Binance is growing stronger as it expands to newer territories to find path-breaking opportunities. Recently Binance labs announced its that Binance labs will be launching its incubator program in five important cities around the world. The cities are Berlin, Buenos Aires, Lagos, Singapore and Hong Kong. The incubator plans to offer programs for early-stage blockchain projects.
Binance’s expansion news comes at a time when venture capitalists are not very keen on backing the young cryptocurrency and blockchain businesses. A recent tweet from Barry Silbert, founder of Digital Currency Group- the parent company of Grayscale investment, gives us an insight on how venture capitalists are even pulling out their commitments even after signing term sheets
We've seen half a dozen fundraising deals fall apart over the past month after the lead pulled out. All is not well in crypto VC investor land
Good time to remind founders that a signed term sheet does not equal cash in the bank
— Barry Silbert (@barrysilbert) December 12, 2018
Replying to this tweet, Erik Voorhees questioned this behavior of venture capital towards blockchain deals saying that doesn’t look as “smart money”
The VCs disappear when markets are down, and flood back in when markets are up. Are they not supposed to be the smart money? Their investing instincts seem little better than the Coors drinkin’ taxi driver all excited about Tron three weeks before the bubble pops. https://t.co/8YTcim5iKQ
— Erik Voorhees (@ErikVoorhees) December 13, 2018
While VC’s are scared to deploy more funds amidst dropping prices, CZ speaks about why these bear times are interesting for making private investments. According to him, the most investable ideas already have a product or a prototype in place, are backed by strong teams and are available at reasonable valuations making them attractive bets now then they were at All-time highs
While many VCs have "paused", we are actually more comfortable investing now.
Valuations are more reasonable, most have prototype/product, only strong teams left. Much better investment opportunities than at ATH. https://t.co/fJKeB6MQdX
— CZ Binance (@cz_binance) December 14, 2018
Binance Labs expansion move was also applauded by Joseph Young who too echoed the same thoughts and sentiments
— Joseph Young (@iamjosephyoung) December 14, 2018
The trust Binance is showing in these crypto startups is noteworthy and at these valuations, Binance is just picking up diamonds at price of coal, condition being, only if you believe in cryptos and blockchain.
Is Binance Lab’s doing the right thing by expanding in uncertain times? DO let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.