FTX and Crypto.com Gear Up to Be the Crypto Industry's New VC Giants

Fresh off colossal marketing campaigns that made them behemoths in the crypto industry, FTX and Crypto.com - two of the most popular crypto exchanges in the United States at the moment - are now looking to solidify their places.

FTX and Crypto.com Gear Up to Be the Crypto Industry's New VC Giants

Besides operating their businesses, both firms are gearing up to pump investments into other firms through venture capital.

FTX Expands Its Influence Even More

Last month was a big one for FTX. The exchange, which climbed to #3 on the CoinMarketCap charts - announced it had launched a new venture capital arm focused on investing in different companies.

FTX Ventures, the new VC arm, has a funding war chest worth $2 billion, obtained from FTX and its chief executive, Sam Bankman-Fried. The venture fund aims to invest in crypto startups worldwide. FTX Ventures will invest in companies across different stages, though it focuses mainly on blockchain gaming, social applications, healthcare, fintech, and software.

FTX Ventures will be led by Amy Wu - a former partner at Lightspeed Venture Partners, a $10 billion VC firm based in Menlo Park. In her statement, Wu said she is especially excited about Web3 gaming and its potential to disrupt mainstream entertainment. With her experience leading investments into different blockchain gaming firms, Wu believes FTX Ventures has significant potential to drive growth with investments.

The launch of FTX Ventures is the latest endeavor for the growing company, which has been a darling for investors and users since it broke into the limelight almost two years ago.

Last month, Brett Harrison, the company's president, announced on Twitter that they are working on adding stock trading to their platform. Harrison said the focus is to integrate impressive features into their stock offering. This way, they can compete with platforms like Robinhood while offering another avenue for customers to purchase stocks in some of their best companies.

Considering FTX's experience with traditional stocks - the company launched trading in fractional, tokenized stocks back in 2020 - they will probably pull it off.

Crypto.com Revives Its Venture Capital Arm

As for Crypto.com, the exchange collected enough revenue from its massive marketing campaigns last year and has commissioned its own venture capital arm. The Singapore-based exchange launched Crypto.com Capital last year, unveiling a $200 million fund to invest in crypto startups. Last month, it expanded with fresh funding.

The new funding, valued at about $550 million, will aid Crypto.com's mission of investing in early-stage crypto startups that show promise.

Jon Russell, the fund's overseer, explained to reporters that their primary focus is on blockchain gaming, decentralized finance (DeFi), and startups building innovative cross-chain solutions. Considering that the crypto industry tends to expand to unknown parts pretty quickly, they are likely keeping their eyes peeled for additional investment opportunities.

While Crypto.com's capital infusion is much smaller than FTX and other exchanges with venture capital arms, it is worth noting that it is exclusively from the company. All $550 million is coming from the exchange's balance sheet, the company taking on no limited partners.

The move is daring, but Crypto.com is fast becoming famous for making bold moves. The company paid a staggering $700 million to acquire the naming rights to the iconic Staples Center last year; the venue tentatively renamed the "Crypto.com Arena."

By fixing its name to the iconic venue, Crypto.com connected with Los Angeles - one of the world's biggest markets. And Crypto.com has embarked on other initiatives. Last week, it partnered with basketball star LeBron James on a blockchain education initiative in James' home of Akron, Ohio.

The launch of these venture capital funds shows how vibrant the crypto industry is. Even with the bear market threatening and scaring off investors, there is still a ton of money in crypto. Companies that put themselves in a position to benefit from this push will stand the test of time.

With names like Binance and Coinbase showing thriving venture capital arms, FTX and Crypto.com are joining an exclusive and vaunted club.


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