Why Binance invested $200M in Forbes

One of the world’s biggest crypto exchanges Binance has announced plans to take a $200 million stake in Forbes, a century-old business magazine and digital publisher.

According to people familiar with the matter, the deal will fund Forbes’ plan to merge with a publicly traded special purpose acquisition company (SPAC), in the first quarter. The deal will get Forbes listed on the New York Stock Exchange under the symbol FRBS. The people added that the crypto exchange will account for half of the $400 million in commitments from institutional investors Forbes announced in August. The move will make Binance one of the biggest owners of Forbes. It would also get two seats out of the nine total seats on Forbes’ board of directors.

Although some investors have grown skeptical about SPAC deals, especially those related to media, Binance is still willing to take the risk. The recent months revealed a broader stock market retrenchment which kept investors on their toes.

Despite world governments questioning the credibility of crypto, more companies and investors are aggressively investing in crypto. This shows an increasing influence in the industry which has recently seen surging valuations and has created the latest class of world billionaires.

Crypto investments have mostly been channeled toward the fintech industry, as well as sports arenas and airwaves which have been backed by a lot of big names. This would be the first time a crypto company is investing in a media outlet – a traditional US media company.

The century-old magazine has gradually become a household name both in the US and the rest of the world. It is best known for its ranking of world’s richest and most influential people. Over the years, Forbes has relentlessly worked to diversify its revenue, including direct-to-consumer, licensing deals, and e-commerce efforts. The company claims to reach about 150 million people through its contents and events.

Binance founder and CEO Changpeng Zhao, or “CZ” recently made it to the Forbes list after his net worth jumped to $96 billion, last month. The figure is merely a conservative estimate which excludes his personal crypto holdings, making him possible worth much more and the richest in the industry.

Zhao believes that content creation will be a growth area for Web 3.0 development. His belief is driven by the success of his company which was founded barely five years ago. The Web 3.0 is a more advanced and decentralized version of the internet that uses blockchain technology. It also underpins cryptocurrencies and non-fungible tokens, or NFTs. The Web 3.0 is an ideal place for crypto exchanges and investors to run their transactions free of any direct or indirect government influence.

“This is the first step into a marketplace that has really high potential when it comes to adoption of Web 3.0-based tools,” a person familiar with Binance’s strategy told CNBC. “Our industry has seen a ton of growth and we think you’d have to be a fool to not position yourself in those sectors that are ripe for infrastructure investment.”