Web2's merger king is now positioning itself as a Web3 strategist.
Huaxing Capital, the force behind landmark mergers like Didi-Kuaidi, Meituan-Dianping, and 58-Ganji, has officially entered the crypto space. Yesterday, its holding board approved a $100 million two-year investment plan for Web3 business expansion and direct crypto asset investments.
The announcement sent Huaxing's shares soaring 33% at market open. This Web2-era kingmaker now seeks to position itself in the emerging financial paradigm shift. Having reshaped Web2 through strategic matchmaking, will Huaxing redefine Web3 boundaries?
Huaxing's Established Crypto Footprint
As China's pioneering new-economy investment bank, Huaxing has participated in nearly every major internet restructuring since its 2005 founding—from Momo's acquisition of Tantan to Tencent's strategic investment in JD.com. Its "investment banking + VC" model made it the unseen hand behind numerous tech giants.
While now making headlines with its board-approved Web3 move, Huaxing's crypto involvement spans years across mining firms, stablecoins, and exchanges:
- 2018: Invested in Circle through its new economy fund
- 2019: Advised Canaan's Nasdaq listing (first blockchain mining IPO)
- 2021: Backed Amber Group (later listed via SPAC at $3B valuation)
- 2022: Invested in Matrixport and facilitated Bitdeer's SPAC merger
- 2023: Advised Bitmain's merger and HashKey Group's funding rounds
From IPOs to M&As, Huaxing has leveraged traditional finance expertise to embed itself in crypto's evolving infrastructure.
Post-Bao Fan: Huaxing's Strategic Pivot
Founder Bao Fan's 2023 disappearance marked a turning point, coming amid declining revenues (40% drop H1 2022) and a $23M net loss versus previous $179M profits. His February 2024 exit accelerated "Huaxing 2.0"—refocusing on hard tech, industrial upgrades, and globalization while deemphasizing consumer internet.
Web3 emerged as a strategic focus, validated when early Circle investment yielded returns during its June 2024 IPO (shares surged 300%). This success inspired the $100M Web3 fund targeting stablecoins, RWA, and ecosystem development, coinciding with Hong Kong's pro-crypto regulatory shift.
FAQs
Why is Huaxing investing in Web3 now?
With traditional revenues declining and Circle's IPO success demonstrating crypto's potential, Web3 represents both diversification and growth opportunity amid Hong Kong's favorable policies.
What advantages does Huaxing bring to crypto?
👉 Decades of deal-making experience and extensive Asian investor networks position it uniquely to bridge traditional finance and emerging crypto ecosystems.
How will this impact crypto markets?
Institutional participation from established players like Huaxing could accelerate mainstream adoption and legitimize Web3 projects seeking traditional finance credibility.
What regulatory challenges might arise?
While Hong Kong's progressive stance helps, navigating evolving global regulations remains key—especially for stablecoin and trading platform operations.
As policy tailwinds meet cyclical recovery, Huaxing's move may signal broader institutional crypto acceptance. Whether its Web2 playbook adapts to Web3's decentralized ethos remains to be seen—but the matchmaker is now all-in on writing crypto's next chapter.