October 9, 2023 16:21 UTC
October 9, 2023 at 21:50 UTC
In a bold move amid a challenging market environment, Hong Kong-based venture capital firm CMCC Global has successfully raised $100 million to boost Asian blockchain startups through the Titan Fund. This initiative comes at a time when global venture capital investment in crypto companies has plummeted by 70.9% year-on-year and the number of deals has plummeted by 54.5%, according to data from PitchBook.
A beacon of support for startups
Titan Fund, which closed its initial funding round on October 4, has gathered participation from a diverse group of 30 investors, including notable entities such as Block.one, Pacific Century Group led by Hong Kong tycoon Richard Li, Winklevoss Capital, Jebsen Capital. and Animoca Brands founder Yat Siu. The fund will strategically channel investments into three key areas: blockchain infrastructure, consumer applications (with a focus on gaming and non-fungible tokens – NFTs), and financial services, which include exchanges, wallets, and lending and borrowing platforms.
Promoting Innovation in Hong Kong
Although it does not have a strict mandate on allocating capital to Hong Kong companies, the Titan Fund aims to invest in the “world’s best entrepreneurs,” according to CMCC Global’s Baumann. Founded in 2016, the company has a “natural attachment” to Hong Kong, recognizing its significant potential in fintech innovation. Baumann expressed optimism about the city’s future in the Web3 space, stating, “If Hong Kong continues on its path to embrace Web3, of course there will be more and more entrepreneurs starting companies in this space. And we can be their first chapter.”
Navigating through market downturns and regulatory changes
The launch of the fund is particularly notable given the current market downturn and past incidents such as the FTX stock market crash. However, the Titan Fund has already completed five investment rounds, two of which went to Hong Kong-based startups: Mocaverse, an NFT project from Animoca Brands that raised $20 million in September, and Terminal 3, a startup Web3 data infrastructure.
Hong Kong, once the birthplace of many crypto companies, has seen a business exodus in recent years due to regulatory uncertainties for digital assets and strict pandemic restrictions. However, a major policy change in October last year, which allowed licensed crypto exchanges to serve retail traders, signaled the city’s renewed embrace of the industry. Despite setbacks such as the collapse of the JPEX exchange, which eroded retail investor confidence, crypto companies in the city remain optimistic about the long-term prospects.
A safe harbor for crypto in Asia
The launch of the VC crypto fund in Hong Kong also underscores the city’s emerging profile as a crypto safe haven, especially in light of the regulatory crackdown in the United States. Yen Shiau Sin, managing director of Titan Fund, emphasized that Asian companies are benefiting as “projects are thinking of coming here to talk to us” due to the crackdown on cryptocurrencies in the US.
In conclusion, CMCC Global’s Titan Fund is emerging as a beacon of support for blockchain startups in Asia, particularly Hong Kong, providing critical financial support amid a challenging market and regulatory environment. The fund’s focus on blockchain infrastructure, consumer applications and financial services is poised to nurture and scale up innovative projects in the blockchain and cryptocurrency space, thereby contributing to the resilience and future growth of the industry.