Binance is banking big on M&A and VC deals

The world's largest crypto exchange by volume, Binance, is making big bets on M&A this year, paying particular attention to geographical gaps and customer base. And to help the exchange get there is the company's chief business officer, Yibo Ling.

He joined Binance nearly seven months ago, after stints at Bird and Uber. Ling's role at the company focuses on VC investments, strategic M&A and business development. And there's a lot to look at there; Binance Labs, the exchange's VC arm, has a portfolio valued at about $9 billion right now, Ling shared. "That's well in excess of 10x return."

I sat down with Ling at Consensus 2023 to learn more about Binance's focus for investments, layer-1 blockchains, geographical and product growth for the business, among a ton of other things.

(This interview has been edited for length and clarity.)

I know you just started recently, but what are the profitability metrics that Binance looks at as its North Star? What are the most impressive or important metrics? And how has performance been?

In my role as chief business officer, I don't primarily focus on operating the exchange, I focus on the deal work that we do. So all the outbound VC investments that focus on strategic M&A, bringing in capabilities to the core exchange, and I focus on our commercial business development relationships. So I'm probably not the right person to talk about that but yeah, the business seems pretty healthy. Clearly the market has meaningful impact, but the business is doing quite well.

When you look at VC investments and strategic M&A, what areas is Binance focusing on and most interested in?

Our VC arm, we call that Binance Labs, and the mission there is really this notion that a tide lifts all boats. So the investments that we do are basically across the board. That's why it's actually good for me to be in places like this [at the conference], because there are so many projects, working on different things. And we very generically invested in almost everything. So let me get more specific in that, but we also invest upstream and downstream.

So we invest in the growth stage, we invest in early stage, seed and [Series] A. Our preference and our focus is on seed and [Series] A going early stage, because that's where we think we can add the most value. But all of that is just to zoom back to the broader thing that we're focused on from Labs perspective. We think that there's just so much potential for growth, for disruption, for improvement in many aspects of how people go about their lives. And so that can be enabled by web3 and blockchain technology. And so, ROI and return metrics are important for us there on that side of the house. The value of our portfolio is around $9 billion right now. That's well in excess of 10x return. Again, mostly in the early stage, some in later stage investments.

For the most part, we don't exit our investments because we're able to buy and hold them really, really long term because of the mission. At this point we have probably over 200 portfolio companies on every continent other than Antarctica. We also have incubation, not just sort of direct investments. And so about a quarter of those portfolio companies come out of our incubation programs.