Mask network, a Startup powered by Binance Which enables users to send cryptocurrency and crypto-messaging on established internet platforms such as Twitter, has an ambitious goal: to become the venture capital powerhouse for businesses in web3 as Tencent has done in web2.
To that end, the five-year-old company recently completed the first closing of its venture capital arm called Bonfire Union. With $42 million in its new fund, the company plans to invest in Web 3’s “social ecosystem,” a version of the internet built largely on blockchain that promises to be more decentralized.
The company has managed to attract a slate of big names in the crypto world despite the bleak outlook for the industry amid the collapse in token prices. They include the cryptocurrency conglomerate Digital Currency Group; Sam Bankman-Fried’s Alameda Research; The world’s largest crypto exchange Binance; One of the most active brands of Animoca cryptocurrency; Dapper Labs, the team behind Cryptokitties; Protocol Labs, developer of the Filecoin distributed file storage project, and Arweave, a company backed by Coinbase and a16z that wants to make data storage permanent, a tool that can be used, for example, to fight censorship
The investment firm says a “large portion” of Mask Network’s backers have gone on to become Bonfire Union investors.
There are much larger crypto funds. But the Bonfire Union management team believes they can better connect with startups, being entrepreneurs themselves.
Against the backdrop of the current “crypto winter,” Suji Yan, founder of Mask Network also known for his online campaign against the culture of overwork in China’s tech sector, acknowledges that Bonfire Union may benefit from discount deals in a bear market. But at the same time, “investors need the courage to pull the trigger.”
In a bull market, Yan suggests, “investors cast a wide net. A startup can easily move to the next funding round if its product isn’t so bad.” But in a bear market, “even if investors really believe in a project, many will wait and see.”
Learn from Tencent
It inspired Tencent Mask Network’s investment strategy. The Chinese internet giant is perhaps best known for its super app WeChat; But synchronization with this flagship product is the investment empire of the projects it owns More than 1,300 companies have been funded globally to date and earned the nickname “SoftBank of China”.
Tencent has a reputation for investing in areas where it falls short rather than trying to build everything itself. It takes a relatively passive approach to its portfolio companies and helps them grow by sharing resources like web traffic – which in turn brings a greater return on investment for itself. One of the most successful engagements is with Pinduoduo, Alibaba’s competitor that took off thanks to its deep integration with WeChat, which allows users to easily share product pages with friends.
Similarly, Bonfire Union aspires to foster interdependent relationships with startups building social services, infrastructure and games for Web 3. Mask Network has already engaged in this approach. Last year, he Make a token swap deal With Arweave after the pair together I worked on Allow users to upload encrypted documents to Twitter and Facebook using decentralized storage.
With Mask Network’s roots in China, Bonfire Union has also originated from a number of Chinese investors, including FreeS, Y2Z, HashKey Group, Hash Global, SevenX, IOSG Ventures, SNZ and Fundamental Labs.
Other investors include former and current CEOs of Coinbase, decentralized finance platform Gitcoin, multi-chain cryptocurrency wallet tracker DeBank, Qiming Ventures, Silicon Valley Bank, Fosun Group, and more.
Mask Network is the largest underlying investor in Bonfire Union after the close and will continue to pump capital through treasury and co-investing by team members. The investment tool works with a team of ten people across Singapore, China, Japan and the United States