Author: Fairy, ChainCatcher
Editor: TB, ChainCatcher
Original Title: $100 Million Bet on Web3, Unveiling the "Merger King" Huaxing Capital's Crypto Investment History
The Merger King of Web2 is now trying to become a Web3 strategist.
Huaxing Capital, which previously led landmark merger cases like DiDi, Meituan Dianping, and 58 Ganji, has officially turned its gaze to the crypto world. Yesterday, Huaxing Capital's board of directors formally passed a strategic resolution, planning to invest $100 million in the next two years for expanding Web3 business and direct crypto asset investments.
Stimulated by this news, Huaxing Capital Holdings surged 33% at market open today. This investment bank that once dominated the Web2 era is now attempting to position itself in a new financial paradigm shift. Will Web3 be redrawn by Huaxing as Web2 was?
Doubling Down on Web3, Huaxing is Not a "New Player"
As one of China's earliest and most knowledgeable local investment banks about new economics, Huaxing Capital has long been at the forefront of restructuring China's internet industry. Since its establishment in 2005, it has deeply participated in almost all key mergers and strategic transactions during China's new economic rise, including landmark cases like Momo acquiring Tantan and Tencent's strategic investment in JD.com. In the primary market, Huaxing has become the "behind-the-scenes promoter" of many giants through its "investment bank + investment" dual-wheel drive model.
Although it is now entering Web3 with a high-profile board resolution, in fact, Huaxing has been quietly laying out its crypto world strategy for years, spanning mining enterprises, stablecoins, trading platforms, and multiple other domains.
As early as 2018, Huaxing's new economic fund invested in Circle. In 2019, Huaxing helped Canaan Creative go public in the US, making it the world's first blockchain mining machine company listed on NASDAQ.
In 2021, Huaxing invested in crypto financial services provider Amber Group through its fund, which later completed a US stock merger listing, with its valuation once exceeding $3 billion, becoming one of Asia's most renowned crypto unicorns.
In 2022, Huaxing Capital completed its investment in Matrixport and helped its affiliated company Bit Deer complete a merger and SPAC listing process, clearing the path for its US stock listing.
In 2023, Huaxing helped Bit Main complete a merger. Meanwhile, Huaxing Securities (Hong Kong) had also served as a financial advisor to Hashkey Group, deeply participating in multiple rounds of its financing.
From IPO planning, investment, to mergers and financing advisory, Huaxing Capital has precisely embedded itself into the crypto ecosystem using traditional investment bank capabilities and localized networks.
Transformation After the Bao Fan Incident
In early 2023, the "disappearance" of Huaxing Capital's founder Bao Fan shocked the entire capital market and pushed this giant to the center of controversy. 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 40% year-on-year, with a net loss of $23 million, compared to a profit of $179 million in the same period the previous year.
After experiencing both high-level vacancy and capital fluctuations, Huaxing was forced to hit the brakes on expansion and began re-examining the group's core positioning. On February 2, 2024, Bao Fan officially resigned from all positions including executive director, board chairman, and CEO. The new management team is leading the company, attempting to "de-Bao Fan" and proposing a "Huaxing 2.0" strategy focusing on hard technology, industrial upgrades, and globalization, weakening the traditional consumer internet label.
Under this transformation approach, Web3 and crypto assets began entering Huaxing's core vision. On June 5th this year, stablecoin issuer Circle successfully went public, opening with a surge and approaching $300 at one point. As an investor in Circle since 2018, Huaxing also reaped returns from this "long-term bet", with its stock price soaring over 16%.
Perhaps this rare capital "linkage" gave Huaxing more confidence to double down on Web3. Shortly after, the board formally passed a resolution to establish a $100 million special budget to enter the Web3 and crypto asset field, focusing on stablecoins, RWA, and the crypto ecosystem, while simultaneously promoting related business license applications and upgrades.
At this time, Hong Kong is experiencing policy warming and gradual improvement of its licensing system. Hong Kong-listed companies are accelerating crypto layouts: Financial technology company IDA is applying for a stablecoin license, CICC International has been approved to provide virtual asset trading services, and companies like Hong Kong BGE Limited have obtained virtual asset trading platform licenses. With policy tailwinds and industry cycles subtly recovering, Huaxing has once again found its entry point.
Huaxing once used capital operations to foster a generation of giants and reshaped industrial landscapes with strategic vision. Its mature approach and deep resources made it invincible in the Web2 era, but will this work in Web3?
Regardless, it is now making its mark in the new crypto landscape.
