YZi Labs Ties Public Fund Opening to AI, Biotech Expertise

YZi Labs, the venture capital arm of Binance founder Changpeng Zhao, is considering opening its $10 billion fund to external investors, marking a significant shift in its investment strategy. The firm, which spun out of Binance in early 2025, currently manages capital for Zhao and a select group of Binance executives, having previously accepted $300 million in external funding in 2022 before partially returning it due to the scale of its existing assets under management . Ella Zhang, the firm’s head, acknowledged growing interest from external investors but emphasized that the move to a public-facing fund is contingent on building expertise in newer sectors like artificial intelligence and biotechnology . “We’re still forming our team and building confidence in these areas. When we have that expertise, we’ll open up for external investors,” Zhang stated, highlighting the firm’s cautious approach to expansion .

YZi Labs’ portfolio spans over 230 companies, including prominent crypto and Web3 projects such as Aptos Labs, Polygon, and 1inch Network, as well as infrastructure and security firms like LayerZero and CertiK . The firm’s focus on early-stage investments in crypto, AI, and biotech aligns with Zhao’s vision of supporting transformative technologies. However, Zhang noted challenges in deploying the $10 billion portfolio, particularly in identifying assets that meet the firm’s stringent criteria. “It’s just so hard to find so many good enough assets to meet our criteria,” she remarked, underscoring the complexity of managing such a large fund .

The potential shift to external investors comes amid a more favorable regulatory climate for crypto in the U.S., particularly under the Trump administration. The Securities and Exchange Commission (SEC) has shown increased openness, including requesting private demos of YZi Labs’ portfolio companies . Zhang praised SEC commissioners like Paul Atkins for their “open-minded” approach, which she believes is fostering a resurgence of crypto entrepreneurs returning to Silicon Valley . This regulatory environment contrasts with the firm’s past legal challenges, including Zhao’s guilty plea for anti-money laundering failures in 2024 .

YZi Labs has also launched the EASY Residence program, a 10-week global incubation initiative targeting early-stage teams in Web3, AI, and healthcare. The program, set to begin in June 2025 in Silicon Valley, will invest $500,000 in each selected startup, split into a $150,000 SAFE note and an additional $350,000 in subsequent funding rounds . This initiative reflects the firm’s commitment to nurturing innovation while aligning with its long-term strategy of expanding its investment footprint.

For external investors, the potential partnership with YZi Labs offers access to a diversified portfolio of high-growth sectors. The firm’s track record of backing 250 projects, with 70% allocated to digital assets, positions it as a key player in the evolving crypto and tech landscape . However, risks remain, including regulatory scrutiny and the volatility inherent in crypto and AI markets. Zhang emphasized the “huge responsibility” of managing external capital, stressing the need for alignment between the firm’s vision and investor expectations .

The move to open YZi Labs to public investors could amplify its influence, particularly as institutional demand for crypto-native funds grows. Competitors like Galaxy Digital have already raised $175 million for their first external venture fund, signaling broader market appetite . For YZi Labs, the strategic pivot represents both an opportunity to scale and a test of its ability to navigate the complexities of public investment in a rapidly evolving industry.

Source: [1] Venture Firm YZi Labs Explores External Investments (https://www.coingabbar.com/en/crypto-currency-news/czs-10b-venture-firm-yzi-labs-eyes-public-funding) [2] Changpeng Zhao Opens YZi Labs to Investors (https://capwolf.com/changpeng-zhao-opens-yzi-labs-to-investors/) [3] Former Binance CEO CZ’s YZi Labs May Open to External Investors (https://cointelegraph.com/news/cz-yzi-labs-may-open-to-external-investors) [5] YZi Labs Announces Global Incubation Program EASY Residence (https://www.theblockbeats.info/en/flash/293619)