Binance, the world's largest cryptocurrency exchange, is making a $200 million strategic investment in Forbes, a print and digital publisher, founded in 1917 and best known for the magazine of the same name. The funding from Binance is supposed to assist Forbes in completing a planned merger with a special purpose acquisition company (SPAC) in the first quarter of 2022.
Forbes announced in August 2021 that it had obtained commitments of $400 million from institutional investors. Binance reportedly is stepping in to fund half that amount, despite growing skepticism about SPAC deals, especially those involving media companies. If the deal proceeds, Binance will be one of the two largest owners of Forbes, with two out of nine board seats. Forbes plans to be listed on the New York Stock Exchange (NYSE) under the symbol FRBS.
- Binance, the world's largest cryptocurrency exchange, is making a $200 million investment in print and digital publisher Forbes.
- This is part of a deal to take Forbes public via merger with a SPAC.
- A key goal for Binance is using media "to build widespread consumer understanding and education" regarding crypto.
- Forbes looks to increase its own efforts to "demystify" blockchain and digital assets.
Binance founder and CEO Changpeng Zhao, who prefers to be called simply "CZ," has an estimated net worth of at least $96 billion, according to Bloomberg. This makes him by far the richest cryptocurrency entrepreneur.
Binance reports having an average daily volume of 2.0 billion transactions, or 1.4 million transactions per second. Binance Coin (BNB) is the native asset on Binance Chain, a blockchain software system developed by Binance and the community.
Binance says: "Our mission is to be the infrastructure services provider for the blockchain ecosystem." It also says: "Our vision is to increase the freedom of money globally. We believe that by spreading this freedom, we can significantly improve lives around the world."
Forbes magazine, the flagship offering of Forbes, was launched in 1917 by the grandfather of longtime editor-in-chief and two-time U.S. presidential candidate Steve Forbes. In 2014, Forbes sold a 95% stake to Hong Kong-based Integrated Whale Media at a valuation of $475 million.
Forbes, which also has branched into digital publishing, has been diversifying its revenue through licensing deals, e-commerce, and direct-to-consumer efforts. Forbes indicates that it reaches 150 million people through its content and events.
About the Deal
The SPAC that plans to merge with Forbes is Magnum Opus Acquisition Limited (OPA). Magnum Opus, based in Hong Kong, is sponsored by private investment firm L2.
Binance's strategic investment will be through Binance's assumption of subscription agreements representing $200 million of commitments in the $400 million private investment in public equity (PIPE) that was announced along with Forbes' intention to go public.
"With Binance assuming existing PIPE commitments, the overall size of the PIPE will remain at $400 million, and Binance's investment will be according to substantially the same terms as the existing PIPE investors," the announcement reads.
As part of the deal, Binance's Chief Communications Officer Patrick Hillmann and Head of Binance Labs Bill Chin will join the Forbes board of directors. Binance Labs is the venture capital and incubator arm of Binance.
Rationale for Binance
Binance's planned investment in Forbes suggests that Zhao is betting on content generation as a key growth area for Web 3.0 development. Web 3.0 is a more decentralized version of the internet that uses blockchain technology, which also underpins cryptocurrencies and non-fungible tokens (NFTs).
Binance founder and CEO Changpeng Zhao sees supporting media as a way to boost consumer knowledge and adoption of crypto. He stated: "As Web3 and blockchain technologies move forward and the crypto market comes of age, we know that media is an essential element to build widespread consumer understanding and education. We look forward to bolstering Forbes' digital initiatives, as they evolve into a next-level investment insights platform."
A spokesperson for Binance told crypto-focused website Cointelegraph that the crypto exchange's investment in Forbes "would be the first investment of this kind" in the media industry, adding: "Web2 had a profound impact on the media sector. We believe that Web3 may have an equally important role to play in the future of journalism and publishing."
In April 2020, Binance acquired CoinMarketCap, the most popular crypto website with 187 million visits as of August 2021. The firm subsequently created its own crypto education portal, CMC Alexandria, in September 2020.
Rationale for Forbes
Forbes CEO Mike Federle stated: "Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets. With Binance's investment in Forbes, we now have the experience, network and resources of the world's leading crypto exchange and one of the world's most successful blockchain innovators. Forbes, already a resource for people interested in the emerging world of digital assets, can become a true leader in the field with their help."