
- February 10, 2022
Binance, which is led by the worlds richest crypto billionaire, is taking a $200 million stake in Forbes.
- Binance, the world's largest cryptocurrency exchange, is investing $200 million in Forbes, the 104-year-old magazine and digital publisher.
- The funds will be used to help Forbes complete its plan to merge with a publicly traded special purpose acquisition company, or SPAC, in the first quarter, according to people with knowledge of the deal.
- Binance would replace half of the $400 million in institutional investor commitments revealed earlier, making it one of the top two largest shareholders of Forbes after its listing, the people said.
Binance, the world's largest cryptocurrency exchange, is investing $200 million in Forbes, the 104-year-old magazine and digital publisher.
The funds will be used to help Forbes complete its plan to merge with a publicly traded special purpose acquisition company, or SPAC, in the first quarter, according to people with knowledge of the deal.
In recent months, investors have become wary about SPAC purchases in general, and media deals in particular, due to the larger stock market downturn. Binance will replace half of the $400 million in institutional investment commitments announced by Forbes in August, said the people, who declined to be identified before the transaction is disclosed.
That would make Binance one of the top two largest shareholders in Forbes, which will be listed on the New York Stock Exchange under the ticker FRBS, the people said. The crypto company will also get two directors out of nine total board seats, they said.
The move demonstrates the crypto sector's growing real-world significance, which has witnessed soaring valuations and spawned a new class of billionaires amid global interest in digital assets. While cryptocurrency companies have gone public, branded sports arenas, and inundated the airwaves with celebrity endorsements, this is the sector's first major investment in a traditional American media property.
Forbes was created by the grandfather of editor-in-chief and two-time presidential candidate Steve Forbes more than a century ago. Forbes sold a 95 percent ownership in the company to Hong Kong-based Integrated Whale Media for $475 million in 2014.
Forbes has attempted to diversify its revenue with licencing arrangements, e-commerce, and direct-to-consumer operations, despite being known for its main magazine and a digital publication model that relies on contributors. The company says, its content and events reach 150 million people.
Forbes is well known for publishing annual lists of the world's wealthiest businesses tycoons.
Changpeng Zhao, the creator and CEO of Binance, recently joined this category. Zhao's net worth, which he goes by the moniker "CZ," was estimated to be $96 billion by Bloomberg News last month. He is easily the industry's richest entrepreneur, according to this amount, which is a conservative estimate that excludes his personal crypto holdings.
Binance's investment shows that Zhao believes content generation will be a growing area for Web 3.0 development. Binance was created only five years ago. Web 3.0 refers to a more decentralised version of the internet that employs the blockchain, which also serves as the foundation for cryptocurrencies and non-fungible tokens (NFTs).
"This is the first step into a market with a lot of promise when it comes to the adoption of Web 3.0-based products," a source familiar with Binance's strategy stated. "Our industry has had tremendous growth, and we believe you'd be a fool not to invest in industries that are ripe for infrastructure investment."
The corporation approached Forbes after identifying three media and content platforms for prospective investment. Forbes had been considering options including an outright sale, said the people.
Insiders in the cryptocurrency space predict a flood of deals this year as companies put the massive sums of money acquired in recent funding rounds to use.
Binance was formed in China in 2017, however it does not have a physical location. It's in the midst of choosing a place for one as a nod to regulators.