Changpeng Zhao’s $10B YZi Labs Sets Sights on Public Funding Expansion

Venture Firm YZi Labs Considers Opening $10 Billion Fund to External Investors

Binance founder Changpeng Zhao’s $10 billion venture capital firm, YZi Labs, is weighing a transformative shift in its investment strategy. The firm, which was spun out of Binance in January, is reportedly considering opening its substantial fund to outside investors. This development comes as global investor interest in digital assets, artificial intelligence, and biotech reaches unprecedented levels.

According to a recent Financial Times report, YZi Labs, led by former Binance Labs head Ella Zhang, is exploring whether to allow external investors to participate in its venture capital activities. While Zhang emphasized that the firm is still in the early stages of team building in AI and biotech, she acknowledged that the demand from potential outside investors has been significant. “There’s always a lot of external investors interested, and we will eventually consider turning it into an external-facing fund. We just think it’s not there yet,” she said.

Zhang characterized the possibility as a “huge responsibility,” highlighting the complexities of managing external capital at such a scale. “In AI and biotech, we’re still early. We’re forming our team. When we have that expertise, and we have the confidence level, we’ll open up for external investors,” she added.

A Potential Game-Changer in Venture Capital

YZi Labs was initially created to manage Zhao’s wealth, along with funds from a small circle of Binance executives. In 2022, the firm briefly accepted $300 million in external capital but later returned some of the funds after realizing the scale of its internal assets under management. Currently, the firm oversees billions, making it one of the largest pools of capital dedicated to technology and cryptocurrency investment.

The possibility of converting YZi Labs into a fully-fledged venture fund could significantly alter the global investment landscape. Analysts note that the $10 billion fund would immediately rank among the largest in the industry, with the potential to shape investment trends across multiple sectors. However, deploying capital on this scale presents unique challenges.

Zhang acknowledged this difficulty, referencing Zhao’s own remarks on the matter. “Your challenge is to deploy,” she said. “It’s just so hard to find so many good enough assets to meet our criteria.”

Surging Investor Interest

Despite these challenges, interest from outside investors has been growing steadily. According to Zhang, institutional demand has reached levels that make a shift toward external participation increasingly viable. “The demand is very high. A lot of external investors want to invest alongside us. For the majority of the projects we invest in, we’re not in a rush to exit. But it’s hard to deliver what they expect,” she noted.

Market watchers argue that opening YZi Labs to outside investors could democratize access to some of the world’s most promising early-stage projects, particularly in the fields of blockchain, artificial intelligence, and biotechnology. These sectors are attracting unprecedented levels of capital due to their disruptive potential and growing adoption across industries.

The firm’s strategy is not to chase short-term returns but to focus on long-term value creation. This approach resonates with investors who are increasingly looking for stable, innovative, and well-curated opportunities in a volatile global economy.

Endorsement of U.S. Crypto Regulation

In a notable shift, Zhang praised recent regulatory developments in the United States, citing the administration of President Donald Trump and the SEC’s more favorable approach toward digital assets. She said that this renewed stance has created an encouraging environment for entrepreneurs and investors alike.

According to Zhang, SEC commissioners such as Paul Atkins have demonstrated a more open-minded attitude toward the industry. The SEC’s interest in private demonstrations from crypto companies backed by YZi Labs underscores this regulatory pivot. Zhang observed that the friendlier climate has already motivated several crypto entrepreneurs, who had previously left the U.S. due to regulatory pressures, to return to Silicon Valley.

This change positions the United States as a potential hub for digital asset development once again, countering concerns that heavy-handed regulations might drive innovation overseas. The acknowledgment from a leading global venture firm like YZi Labs adds weight to the argument that the U.S. is regaining its competitive edge in crypto innovation.

Strategic Focus Areas

YZi Labs’ investment strategy currently spans multiple high-growth sectors, including cryptocurrency, blockchain infrastructure, artificial intelligence, and biotechnology. By diversifying its focus, the firm aims to balance the high volatility of digital assets with the long-term promise of AI and biotech.

The challenge, as Zhang points out, is finding high-quality projects at the scale required for a $10 billion fund. While capital is abundant, truly innovative startups that can meet YZi Labs’ strict criteria are far rarer. The firm’s rigorous due diligence process ensures that only the most promising ventures receive backing, but this creates natural bottlenecks in the pace of capital deployment.

Still, with billions already under management and an eye toward global expansion, YZi Labs is uniquely positioned to influence the direction of emerging technologies. Whether through crypto infrastructure projects, AI platforms, or biotech breakthroughs, the firm’s portfolio has the potential to define the next wave of technological innovation.

The Road Ahead

The question now is not whether YZi Labs will eventually open its doors to external investors, but when. The firm’s leadership has made it clear that while the interest is overwhelming, they will only move forward once the right expertise and structures are in place. This cautious approach reflects the magnitude of responsibility associated with managing external funds at such a scale.

For investors, the prospect of gaining access to YZi Labs’ portfolio is an enticing one. With Changpeng Zhao’s reputation as one of the most influential figures in the cryptocurrency world, and Ella Zhang’s track record as a disciplined investment leader, the firm offers a rare combination of vision and credibility.

Industry analysts predict that if YZi Labs proceeds with the transition, it could trigger a ripple effect across the venture capital ecosystem. Other large firms may follow suit, opening their doors to external capital in ways that were previously unthinkable. This could, in turn, reshape the dynamics of innovation funding on a global scale.

Conclusion

YZi Labs’ consideration of opening its $10 billion fund to external investors represents a pivotal moment for both venture capital and the broader technology landscape. By potentially democratizing access to world-class investment opportunities, the firm could accelerate innovation in sectors ranging from cryptocurrency to biotech. At the same time, its cautious approach underscores the immense responsibility tied to managing such vast sums of capital.

As the SEC signals a more supportive regulatory stance and investor demand continues to surge, YZi Labs stands at the crossroads of opportunity and responsibility. Its next moves will not only determine its own trajectory but may also shape the future of venture capital itself.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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