$100 million, a seven-year layout, the Web3 advancement path of Huaxing Capital, the "King of Web2 Mergers and Acquisitions".

Original author: Fairy, ChainCatcher

Original text edited by: TB, ChainCatcher

The king of mergers and acquisitions in Web2 is trying to become a player in Web3.

Huaxing Capital, which has previously led major merger cases such as Didi Kuaidi, Meituan Dianping, and 58 Ganji, has officially turned its attention to the crypto world. Yesterday, the board of directors of Huaxing Capital Holding formally approved a strategic resolution to invest 100 million USD over the next two years for the expansion of the Web3 business under the group and for direct investments in crypto assets.

Stimulated by this news, Huaxing Capital Holdings surged 33% at the opening today. This investment bank, which once influenced the situation during the Web2 era, is now attempting to position itself again in the new round of financial paradigm shifts. Web2 was orchestrated into a "game" by Huaxing; will Web3 be redefined by it?

100 million USD, seven years of planning, "Web2 Acquisition King" Huaxing Capital's journey into Web3

Increasing Investment in Web3, Huaxing is Not a "New Player"

As one of the earliest and most knowledgeable local investment banks in China's new economy, Huaxing Capital has long been at the forefront of the restructuring of China's internet industry. Since its establishment in 2005, it has been deeply involved in almost all key mergers and strategic transactions during the rise of China's new economy, including iconic cases such as Momo's acquisition of Tantan and Tencent's strategic investment in JD.com. In the primary market, Huaxing has adopted a "banking + investment" dual-drive model, becoming the "behind-the-scenes driver" for many giants.

Although it has recently entered Web3 with a high-profile resolution from the board, in fact, Huaxing has quietly laid out its presence in the crypto world for many years, covering various fields such as mining enterprises, stablecoins, and trading platforms.

As early as 2018, Huaxing's New Economy Fund invested in Circle. In 2019, Huaxing helped Canaan Technology go public in the United States, making it the first blockchain mining company to be listed on NASDAQ.

In 2021, Huaxing invested in the crypto financial service provider Amber Group through its affiliated fund. The project later completed a merger and went public in the U.S., with a valuation that once exceeded $3 billion, making it one of the most well-known crypto unicorns in Asia.

In 2022, Huaxing Capital completed its investment in Matrixport and assisted its affiliated company Bitdeer in completing the merger and SPAC listing process, clearing the way for its entry into the US stock market.

In 2023, Huaxing helped Bitmain complete its acquisition. At the same time, Huaxing Securities (Hong Kong) also served as the financial advisor for Hashkey Group, deeply participating in the company’s multiple rounds of financing.

100 million USD, seven years of planning, "Web2 Acquisition King" Huaxing Capital's journey into Web3

From listing planning, investment shareholding, to mergers and acquisitions restructuring and financing advisory, Huaxing Capital precisely integrates into the cryptocurrency ecosystem with the hard-core capabilities of a traditional investment bank and a localized network.

After the Bao Fan incident, Huaxing is transforming

At the beginning of 2023, the "disappearance" of Bao Fan, the founder of Huaxing Capital, shocked the entire capital market and pushed this giant to the center of attention. However, even before Bao Fan's "disappearance," Huaxing Capital's performance had already shown a significant decline. In the first half of 2022, revenue plummeted by 40% year-on-year, resulting in a net loss of up to 23 million USD, while the company was still in a profitable state with 179 million USD in the same period of the previous year.

After experiencing the dual blows of high-level vacancy and capital fluctuations, Huaxing was forced to hit the brakes on its expansion and began to re-examine the core positioning of the group. On February 2, 2024, Bao Fan officially resigned from all his positions as the company's executive director, chairman of the board, and CEO. The company is now led by a new management team, attempting to "de-Bao Fan" and proposing the "Huaxing 2.0" strategy, focusing on hard technology, industrial upgrading, and globalization, while downplaying the traditional consumer internet label.

Under this transformation strategy, Web3 and crypto assets have begun to enter Huaxing's core vision. On June 5th of this year, the stablecoin issuer Circle successfully went public, with an opening surge that approached $300. As an investor that bet on Circle in 2018, Huaxing also welcomed returns from this "long-term bet", with its stock price soaring over 16% at one point.

Perhaps it is this long-awaited capital "linkage" that has given Huaxing more confidence to heavily invest in Web3. Shortly thereafter, the company's board of directors officially passed a resolution to allocate a special budget of 100 million USD to enter the Web3 and cryptocurrency asset fields, focusing on stablecoins, RWA, and the cryptocurrency ecosystem, while simultaneously advancing the application and upgrade of related business licenses.

At this moment in Hong Kong, the policy is warming up, and the licensing system is gradually improving. Hong Kong-listed companies are accelerating their layout in the cryptocurrency sector: the fintech company IDA is applying for a stablecoin license, Guotai Junan International has been approved to provide virtual asset trading services, and companies like Hong Kong BGE Limited have also obtained licenses for virtual asset trading platforms. With the policy tailwind and the industry cycle quietly warming up, Huaxing has once again found the right entry point.

100 million USD, seven years of planning, "Web2 M&A King" Huaxing Capital's Web3 advancement journey

Huaxing has previously used capital operations to facilitate the rise of industry giants and has also reshaped the industrial landscape with strategic vision. Its mature strategies and deep resources made it invincible during the Web2 era, but in Web3, will all of this still be effective?

Regardless, it is leaving its signature in the new landscape of encryption.

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