Why did Binance invest $200 million in Forbes?

Note: This article first appeared on Substack. Subscribe today to get early access to the newsletter and other community benefits.

Binance, the world’s biggest crypto exchange, is investing $200 million in Forbes. I saw the news on Thursday and thought it was interesting, primarily because I didn’t see this coming. What fellowship does Forbes have with Binance, I wondered. But upon closer examination, it made sense.

Let’s dig in.

Forbes plans to go public on the New York Stock Exchange later this quarter through a partnership with Magnum Opus Acquisition Limited, a publicly-traded special purpose acquisition company (SPAC), at a market value of $630 million.

The goal is to raise $600 million, with $200 million from Magnum Opus’ trust account and $400 million worth of shares from private individuals and institutions. The latter is where Binance comes in. As part of the process, it will invest $200 million in Forbes.

The motive

There are two ways to think about this.

The first is as Binance CEO Changpeng Zhao tells CNBC. It’s a way to help the 104-year-old Forbes transition successfully into Web3, having made leaps over the years from print to Web 1.0 and Web 2.0. Binance will offer strategic advice for how the media company can integrate concepts like NFTs, read-to-earn, micropayments, and subscription payments in crypto.

It’s admirable how long Forbes has been around and how often it’s had to reinvent itself. It began as a print magazine in 1917 and has successfully evolved to include an online publication attracting millions of page views monthly and generating $70-80 million in annual revenue. This investment represents another step in that evolution.

The second way to think about it, and the more likely motive for this investment, is that Binance sees this as an opportunity to push crypto further into mainstream consciousness. Again, from Zhao:

“As Web 3 and blockchain technologies move forward and the crypto market comes of age, we know that media is an essential element to build widespread consumer understanding and education.”

I can’t fault Binance for making this investment, and neither can I side-eye Forbes for taking it. I’ve long thought of Forbes less as a journalistic platform and more as a content marketing engine. So, this transaction makes sense. Forbes needs the money and has the audience. Binance wants the audience and has the money.

If we end today’s newsletter here, you’d have gotten the point. But let’s dig deeper. Why does Binance need to make this investment? And, why Forbes, with all its conspicuous imperfections?

Media and mass adoption

Ideas don’t spread on their own. Products don’t become popular by accident. They need to be pushed socially and financially.

Procter & Gamble realised this as far back as the 1920s when it began sponsoring daytime radio dramas to sell soap to stay-at-home wives and mums. While this is technically advertising, the strategy behind it points to a trend that would calcify many decades later.

1. P&G’s soap opera strategy

In 1927, P&G sponsored NBC’s “Radio Beauty School” to promote Camay, its perfumed soap brand. From 1933 to 1956, it sponsored the 15-minute radio serial “Ma Perkins” to promote Oxydol laundry soap. The company has gone on to back several long-running radio and television shows to advertise its products, including “Guiding Light”, which aired for 57 years from 1952 to 2009, making it the longest-running TV drama according to Guinness World Records.

What’s peculiar about P&G’s strategy wasn’t just that it was advertising soap to stay-at-home wives and mums through radio and TV shows, earning it a mythical status as the inventor of “soap operas”. It’s that it was actively involved in determining the type of content surrounding its adverts to the point of notoriety.

Furthermore, its marketing spend has been so influential that this scholar concludes it “helped to establish media systems in other countries and intervened in the daily realities of people living as workers and consumers”.

2. Making superheroes mainstream

Brands like Disney, Marvel, DC, and LEGO have shown that content marketing can effectively propagate ideas and shape behaviour. Comic books and superhero movies (as lucrative as they can be on their own) have proven potent in bringing toys, action figures, and niche characters into the mainstream.

Marvel, for example, has completely changed how many people perceive and experience cinema, much to the displeasure of legendary director Martin Scorcese. Disney, Marvel’s parent company, uses content to drive traffic to its resorts and boost merch sales.

LEGO itself has toyed with this strategy, launching the Bricks Kicks magazine (remember that?) in the 1980s and dabbling into filmmaking with The Lego Movie and Bionicle series.

In some ways, these brands created the template for content marketing long before the world agreed on the meaning of the term. Several years later, more companies are taking that playbook and pushing the envelope.

3. Software, meet media. Media, software

We’ve seen this trend pervasive with software as a service (SaaS) companies more recently. I wrote about this in “Paystack’s media threat”, using Airbnb, Bumble, and Netflix as examples. But there are more.

In 2019, Robinhood, the stock trading and investing company, acquired MarketSnacks, a media company that made financial news digestible, and rebranded it as Robinhood Snacks. The acquisition gave Robinhood the content and resources it needed to connect deeper with its six million users (at the time) alongside the acquired media company’s already existing audience.

In October 2021, Hubspot bought The Hustle, a business and tech content publisher, for a reported $27 million. The reason? To give Hubspot’s users access to more “educational, business, and tech trend content in their preferred formats”, according to Kieran Flanagan, Hubspot’s SVP of marketing.

Many more examples point to this trend, but very few can compare to the scale of Binance’s investment in Forbes.

Binance, Forbes, and the race to demystify crypto

I didn’t get into crypto until 2020, despite knowing about it since 2018. My biggest barrier? Knowledge and comprehension. I knew a little about crypto, but what little I knew was cryptic and difficult to understand.

There are many more people around the world who can relate, many more who are largely confused about crypto. Some are interested in learning but don’t know where to start, while others couldn’t care less. And it’s this group of people Binance is trying to reach.

In 2020, Binance acquired CoinMarketCap, the world’s most popular crypto website, for an undisclosed amount. Later that year, CoinMarketCap launched CMC Alexandria (named after the Library of Alexandria) to promote crypto education. Binance itself has a high-ranking crypto website that educates users about the technology, aside from serving as an exchange.

Binance isn’t the only company trying to demystify crypto. CoinDesk, another major crypto media platform, is a subsidiary of Digital Currency Group, which builds and invests in crypto companies. Nestcoin, a company building and investing in crypto products for frontier markets, also owns Breach, through which it breaks down abstract concepts for everyday people. (Disclosure: I work at Nestcoin and co-lead its media team.)

For over a decade, crypto existed as a fringe concept, the exuberant pursuit of a few. Esoteric at best, trifling at worst. It has come closer to the mainstream in recent times, but it still hasn’t broken through. For many, even those who swear by it, it remains a mystery, a Latin-centric religious treatise needing reformation.

Like many other technologies and ideas that have preceded it, mass media engagement and an unrelenting investment in education will significantly contribute to crypto’s reformation and adoption.

Therefore, for Binance, investing in a media company that has successfully reinvented itself over a century and is willing to do so again, a company willing to understand and experiment with this new technology while actively talking about it, is an idealistic step in that direction. It’s Martin Luther nailing his 95 theses on the door of the Castle Church in Wittenberg all over again.

PS: A big thank you to Susan Akinade for helping with the research. Thank you to Gift Ajayi, Caleb Ihuarulam, and Adeniyi Makinde for helping me refine the essay.