Blockchain projects preferring long-term partnerships

August 11, 2022 | 10:59
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With the blockchain market showing signs of recovery and the amount of capital increasing sharply in recent weeks globally, investors are now more confident in seeking out stronger connections to move forward.

According to data from Coin98 insights, the total value of funding rounds announced last week amounted to more than $1.5 billion. Lightspeed Venture Partners, a mid-sized global venture fund, has raised its largest fund dedicated to India and Southeast Asia at $500 million. These are two areas that are attracting the attention of investors with many outstanding projects and ideas.

Blockchain projects preferring long-term partnerships
Many entrepreneurs would prefer strategic investment rather than a boat-load of cash straight up, Chi Cuong

Vietnam, which is known as one of the five leading countries and a potential market for blockchain technology development, could benefit from this shift of investment capital.

“The amount of capital invested in blockchain startups in Vietnam in the coming time could reach billions of dollars or more. A huge source of capital will come from Vietnamese investors because the young generation is very passionate about technology,” commented Johnny McCamley, CEO of crypto asset investing consultants CryptoClear, at last month’s Global Blockchain Congress in Hanoi.

Park Bong Kyu, chairman of the Marvels World Blockchain Summit in South Korea, also highly appreciated the potential of the Vietnamese market at the Vietnam-South Korea Cooperation Forum that took place two weeks ago. Kyu said while this industry in South Korea is shrinking, Vietnam is emerging with young businesses and many ideas.

“The Vietnamese blockchain industry has a stronger and more dynamic development potential than the South Korean market,” he said.

In the last few months, the South Korean blockchain market has given investors a bad impression when the Luna cryptocurrency of the Terraform Labs ecosystem crashed in May, causing losses of up to $40 billion for investors.

Although it is estimated that the proportion of capital poured into blockchain startups may account for a third or even half of the total investment capital in startups in Vietnam in the second half of this year, in fact, projects are starting to be pickier about investors than in the previous period.

Instead of choosing investors who are happy to pour money in, projects want long-term companionship with experienced and strategic investment funds that can support their sustainable development.

Phan Thanh Tung, co-founder of Moon Knight Labs, the owner of blockchain game Faraland said, “We care more about the quality of our products than the mobilised capital and do not expect too much from the initial capital. Mobilised capital is essentially a debt. It is difficult for businesses to be creative when carrying a pile of debt.”

Tung said that Moon Knight Labs so far has not needed to use seed round funding because they are still maintaining good revenue-generating activities such as advertising and selling technology.

Meanwhile, the taste of investors is also gradually changing towards being stricter when choosing projects and also more cautious in investment decisions.

According to CEO of HOBBIT Investment William Do, who has successfully raised nearly $10 million for the FOTA game, investors now want to be recognised for their contribution and the value they bring to the project. As a result, they have become tighter than they were during the previous boom.

“If you want to attract investors, you need to inspire them. If you fail to create strong emotions for them to see your project, you have failed from the very first moment of bringing the project to market,” said Do.

Quang Nguyen, CEO of MetaDOS, also agrees that projects need to prove they are worthy of investors’ trust. Nguyen has more than 10 years of experience in game development.

Currently, MetaDos owns two blockchain games, including one that attracts more than 10,000 players every day. Quang confidently asserts that with a current market capitalisation of up to $15 million, they are continuing to raise enough capital to develop products. However, he and his associates aim to develop long-lasting products, focusing on user experience before finance.

“After the market saw a decline with many failed projects, the studio’s approach will be more sustainable in the future,” Quang said.

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