$100 million bet on Web3: Unveiling China Renaissance, the "King of M&A's," crypto investment history

The king of mergers and acquisitions in Web2 is trying to become a player in Web3. China Renaissance, which led era-defining mergers such as Didi Kuaidi, Meituan-Dianping, and 58 Ganji, has officially turned its attention to the crypto world. Yesterday, the board of directors of China Renaissance Holdings formally passed a strategic resolution to invest $100 million in the next two years to expand the group's Web3 business and make direct investments in crypto assets. Stimulated by this news, China Renaissance Holdings opened today with a surge of 33%. This investment bank, which once influenced the situation in the Web2 era, is now trying to position itself again in a new round of financial paradigm shifts. Web2 was brought together by China Renaissance, will Web3 be redefined by it? Adding to Web3, China Renaissance is not a "new player." As one of China's earliest and most knowledgeable local investment banks in the new economy, China Renaissance has long been at the forefront of restructuring China's internet industry. Since its establishment in 2005, it has been deeply involved in almost all key mergers and acquisitions and strategic transactions in the rise of China's new economy, including landmark cases such as Momo's acquisition of Tantan and Tencent's strategic investment in JD.com. In the primary market, China Renaissance has become a "behind-the-scenes pusher" behind a number of giants with its "investment bank + investment" dual-wheel drive model. Although it is now entering Web3 with a high-profile resolution by the board of directors, China Renaissance's layout in the crypto world has in fact been quietly unfolding for many years, spanning multiple fields such as mining companies, stablecoins, and trading platforms. As early as 2018, China Renaissance's New Economy Fund invested in Circle. In 2019, China Renaissance helped Canaan Technology go public in the United States, making it the world's first blockchain mining machine company to land on the Nasdaq. In 2021, China Renaissance invested in crypto financial service provider Amber Group through its fund. The project later completed a merger and listing on the US stock market, with its valuation once exceeding $3.00 billion, becoming one of the most well-known crypto unicorns in Asia. In 2022, China Renaissance completed its investment in Matrixport and, in the same year, assisted its affiliated company Bitdeer in completing the merger and SPAC listing process, clearing the way for its landing on the US stock market. In 2023, China Renaissance helped Bitmain complete its merger. At the same time, China Renaissance Securities (Hong Kong) has also served as the financial advisor to Hashkey Group, deeply involved in multiple rounds of financing for the company. From listing planning and equity investment to mergers and acquisitions and financing advisory, China Renaissance has precisely embedded itself in the crypto ecosystem with its hard-core capabilities and localized network as a traditional investment bank. After Bao Fan's incident, China Renaissance is transforming. In early 2023, the "disappearance" of Bao Fan, the founder of China Renaissance, shook the entire capital market and pushed the giant to the forefront. However, even before Bao Fan's "disappearance," China Renaissance'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 $23.00 million, while the company was still in a state of $179.00 million in profit in the same period last year. After experiencing the double blow of high-level vacancies and capital fluctuations, China Renaissance was forced to step on the brakes of expansion and began to re-examine the group's core positioning. On February 2, 2024, Bao Fan officially resigned from all positions, including executive director, chairman of the board, and chief executive officer of the company. The company is led by a new management team, trying to "de-Bao Fanize" and propose a "China Renaissance 2.0" strategy, focusing on hard technology, industrial upgrading, and globalization, and weakening the traditional consumer internet label. Under this transformation idea, Web3 and crypto assets began to enter China Renaissance's core vision. On June 5 this year, stablecoin issuer Circle successfully went public, soaring at the opening and once approaching $300. As an investor who bet on Circle in 2018, China Renaissance also ushered in returns from this "long-term bet," and its company's stock price once soared by more than 16% as a result. Perhaps it was this long-awaited capital "linkage" that gave China Renaissance more confidence to heavily bet on Web3. Shortly thereafter, the company's board of directors formally passed a resolution to establish a special budget of $100 million to enter the Web3 and crypto asset field, focusing on stablecoins, RWA, and the Cryptocurrency ecosystem, and simultaneously promoting the application and upgrading of relevant business licenses. At this time, Hong Kong is in a period of policy warming and gradual improvement of the licensing system. Hong Kong-listed companies have accelerated their crypto layout: fintech company IDA is applying for a stablecoin license, Guotai Junan International has been approved to provide virtual asset trading services, and Hong Kong BGE Limited and other companies have also obtained virtual asset trading platform licenses. In the current context of policy tailwinds and a quiet recovery in the industry cycle, China Renaissance has once again found the right entry point. China Renaissance once used capital operations to bring about the rise of a generation of giants, and it has also reshaped the industrial landscape with a strategic vision. Mature tactics and deep resources have made it invincible in the Web2 era, but in Web3, will all of this still work? In any case, it is leaving its signature in the new crypto landscape. [ChainCatcher]