Home Cryptocurrency Bonfire Union, With $42M First Fund, Wants to Invest in Web3 Like Tencent’s in Web2 – TechCrunch

Bonfire Union, With $42M First Fund, Wants to Invest in Web3 Like Tencent’s in Web2 – TechCrunch

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Bonfire Union, With $42M First Fund, Wants to Invest in Web3 Like Tencent’s in Web2 – TechCrunch


Mask Network, a Binance-backed startup that enables users to send cryptocurrencies and encrypted messages on established internet platforms like Twitter, has an ambitious goal: to become the corporate venture capital powerhouse of the web3, just as Tencent is in as done in web2.

To that end, the five-year-old company recently completed the first closure of its venture capital arm, Bonfire Union. With the new $42 million in funding, the company plans to invest in web3’s “social ecosystem,” a version of the internet built largely on a blockchain that promises to be more decentralized.

Despite the slump in coin prices and the bleak outlook for the industry, the company has managed to attract a list of the biggest names in the crypto world. A “significant portion” of Mask Network’s backers later became investors in Bonfire Union, the investment firm said, without disclosing their identities.

Mask’s past investors include cryptocurrency group Digital Currency Group; Sam Bankman-Fried’s Alameda Research; Binance, the world’s largest cryptocurrency exchange; Animoca Brands, one of the most active crypto VCs; Dapper Labs, the team behind Cryptokitties Protocol Labs is the developer of distributed file storage project Filecoin, and Arweave, a company backed by Coinbase and a16z, wants to make data storage permanent, a tool that can be used to fight censorship.

Former and current executives at Coinbase, decentralized finance platform Gitcoin, and multi-chain crypto portfolio tracker DeBank also funded Mask.

With roots in China, Mask also counts Chinese institutions such as FreeS, Y2Z, HashKey Group, Hash Global, SevenX, IOSG Ventures, SNZ and Fundamental Labs as its investors.

There are bigger crypto funds out there. But Bonfire Union’s management team believes it can better connect with startups because they are entrepreneurs themselves.

Against the backdrop of the current “cryptocurrency winter,” Suji Yan, founder of Mask Network, known for opposing the overworked culture of China’s tech industry, admitted that the Fiberhome Alliance could benefit from discounted deals in the bear market. But at the same time, “investors need to have the guts to pull the trigger.”

In a bull market, Yan said, “investors are casting a wide net. If a startup’s product is good, it’s easy to get to the next round of financing.” But in a bear market, “even if investors really believe in a project, there are A lot of people will wait and see.”

Learn from Tencent

Tencent’s investment strategy inspired Mask Network. The Chinese internet giant is probably best known for its super app WeChat. But complementing the flagship product is its venture capital empire, which has so far funded more than 1,300 companies around the world and earned it the nickname “China’s SoftBank.”

Tencent is known for investing in under-invested areas rather than trying to build everything on its own. It takes a relatively hands-off approach to its portfolio companies and helps them grow by sharing resources such as web traffic — which in turn generates a greater return on investment for itself. One of its most successful collaborations was with Alibaba’s challenger Pinduoduo, thanks to a deep integration with WeChat that allows users to easily share product pages with friends.

Likewise, Bonfire Union aspires to build interdependent relationships with startups building social services, infrastructure and games for the web3. Mask Network has dabbled in this approach. It struck a token swap deal with Arweave last year after the two sides worked together to let users upload encrypted files on Twitter and Facebook using decentralized storage.

Mask Network was the largest cornerstone investor in Bonfire Union after the closing bell and will continue to inject capital through its capital and co-investment by team members.The investment vehicle has a team of ten in Singapore, China, Japan and the US

Bonfire’s other limited partners include former and current executives from Qiming Venture Partners, Silicon Valley Bank and Fosun Group.

The article has been updated to correct the Investor List for the Campfire Alliance.

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