Tesla Inc TSLA CEO Elon Musk has landed backers for his buyout of social media platform Twitter Inc TWTR.
Among the investors were two names that are well known in the cryptocurrency space: Binance and a16z.
Cryptocurrency platform Binance is contributing $500 million towards the acquisition.
“We hope to be able to play a role in bringing social media and web3 together and broadening the use and adoption of crypto and blockchain technology,” CEO Changpeng Zhao told The Block Crypto. He called the $500 million “a small contribution to the cause.”
Another contributor to the new funding was a16z, which is committing $400 million for the acquisition. A16z, also known as Andreessen Horowitz, is a well-known venture capital firm. Co-founder Ben Horowitz shared news of the investment and the reasons why in a thread on Twitter.
“We are joining Elon Musk’s bid for Twitter and investing $400MM into the company. We invested, because we believe in Ev and Jack’s vision to connect the world and we believe in Elon’s brilliance to finally make it what it was meant to be,” Horowitz said, referencing Twitter co-founders Evan Williams and Jack Dorsey.
“While Twitter has great promise as a public square, it suffers from a myriad of difficult issues ranging from bots to abuse the censorship.”
Related Link: Does Elon Musk Own 101 Bored Ape Yacht Club NFTs?
Why It’s Important: Among the biggest issues Musk has called out on Twitter are the crypto bots, which have both been referenced by Zhao and Horowitz.
Zhao previously called out the crypto scam issue being more important than an edit button, when Musk proposed the possibility of the edit feature to his followers.
“Getting rid of spam is probably higher priority. Protect users,” Zhao said.
Horowitz said Musk is the only person who has the “courage, brilliance and skills to fix” items like censorship and crypto bots.
A16z and Binance are two of the bigger investors in the crypto space and could provide access and tools to Twitter to help implement web3 and blockchain initiatives.
A16z is an investor in OpenSea, Dapper Labs and Bored Ape Yacht Club parent company Yuga Labs. A16z is also an investor in several blockchains that have their own tokens and platforms.
While the investment by Binance and a16z could be simply equity for the deal in hopes of Twitter going up in value, it could also be strategic by Musk and the parties involved as further implementation of growth of web3.
Musk has been a vocal opposer of NFTs but has also openly supported the cryptocurrency market with many tweets and discussions of Bitcoin BTC/USD and Dogecoin DOGE/USD.
TWTR Price Action: Twitter shares trade around $50.36 versus a buyout price of $54.20 from Musk.
Photo collage created using Freepik/Steve Jurvetson on Flickr
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.