Paradigm Closes Record-Breaking $850 Million Fund as Venture Investments in Crypto Startups Surge
Venture capital firm Paradigm has concluded its third fund dedicated to investing in early-stage crypto and blockchain projects.
According to the announcement, Paradigm has finalized an $850 million investment fund, making it one of the largest fundraises in cryptocurrency history. The discussions about this new fund have been ongoing for several months, following the recovery of the crypto markets.
A Strengthened Conviction Since 2018
Matt Huang, co-founder and managing partner of Paradigm, expressed an increased conviction in the importance of cryptocurrencies and blockchain.
When we founded Paradigm in 2018, we believed that cryptocurrencies would be one of the most significant technical and economic changes of the decades to come. Six years later, this conviction has only grown stronger.
This determination is reflected in Paradigm’s strategic investments in several notable companies in the sector.
Strategic Investments and Notable Failures
Paradigm has invested in several renowned crypto companies such as Coinbase, Fireblocks, Blast, Optimism, Uniswap, MakerDAO, Chainalysis, and Friend.tech. However, the firm has also experienced setbacks, including a $278 million investment in the now-collapsed cryptocurrency exchange FTX. In November 2022, Paradigm reduced this investment to zero.
Speculations and Realities of the New Fund
Speculations about the size of the new fund have been circulating for several months. In September 2023, The Information reported that Paradigm was targeting a $1 billion raise. A few months later, in April, Bloomberg reported that Paradigm was in discussions with investors to raise between $750 million and $850 million. Ultimately, the sum of $850 million was achieved, confirming the rumors and strengthening Paradigm’s position in the industry.
An Expanding Investment Landscape
Paradigm’s new fund is the largest raise since it closed a $2.5 billion fund in November 2021. According to data compiled by Galaxy Research, investors injected $2.49 billion into 603 deals in the first quarter of 2024, marking a 29% increase in funding and a 68% increase in deal volume.
Competition Strengthens with Pantera Capital
Paradigm is not the only venture capital firm raising funds for new crypto investments. Pantera Capital is also seeking to raise over $1 billion for a new fund offering exposure to a “full spectrum” of blockchain assets. This fund is planned for launch in April 2025.
