Hong Kong-based cryptocurrency-focused venture capital firm, CMCC Global, has successfully raised $100 million for its new Titan Fund, despite the challenges faced by the crypto sector in the wake of last year’s collapses. The fund’s first round of funding saw participation from over 30 investors, including prominent names like Block. one, Richard Li’s Pacific Century Group, Winklevoss Capital, Jebsen Capital, and Animoca Brands founder Yat Siu.
CMCC Global’s Titan Fund, it’s fourth fund to date, provides equity investments to early-stage blockchain startups, strongly emphasizing those based in Hong Kong. While the fund has already invested in five companies, including two from Hong Kong, it doesn’t have a strict mandate regarding capital allocation to local companies. Instead, it seeks to invest in the best global entrepreneurs. However, CMCC Global’s co-founder, Martin Baumann, expressed the firm’s attachment to Hong Kong and its belief in the city’s potential for FinTech innovation.
If Hong Kong continues on its route of embracing Web3, there will naturally be more and more entrepreneurs starting companies in that space, and we can be their first capital.
Hong Kong, once a hub for cryptocurrency firms, saw many such businesses leave in recent years due to regulatory uncertainties and pandemic-related restrictions. However, a policy shift in October of the previous year signaled the city’s intention to embrace the industry with new regulations allowing licensed crypto exchanges to accept retail traders. Despite recent challenges, crypto firms in Hong Kong remain optimistic about the long-term prospects. Baumann added,
Ever since Hong Kong embraced this [sector], we see a steady increase [of] new companies aiming to settle down here and companies relocating to Hong Kong.
In contrast to the challenging fundraising environment in the crypto sector, Titan Fund’s successful raise reflects growing interest in blockchain and cryptocurrency ventures in Asia. A crackdown on crypto in the United States has made Asian firms more appealing to global projects seeking partnerships.
Despite the overall decline in venture capital investments in crypto firms in recent quarters, Titan Fund remains committed to its investment strategy. The fund will focus on three key areas: blockchain infrastructure, consumer applications including gaming and NFTs, and financial services such as exchanges, wallets, and lending platforms. However, the fund does not consider exchanges its primary focus due to the challenges associated with entering this market.
According to Baumann, the world already has sufficient exchanges that are well capitalized. He explained that recent events in Hong Kong make it difficult for new competitors to enter the market.
The Securities and Futures Commission (SFC) of Hong Kong is currently in the process of establishing guidelines for the euthanization of authorized investment products, with a particular emphasis on primary trading. The regulatory approach being taken is technology-neutral and principles-based, as highlighted by Christina Choi. However, there are concerns about the challenges of secondary trading in a tokenized environment, including issues related to liquidity and record-keeping.
