Crypto venture capital firm Paradigm is in discussions to raise a substantial fund, reportedly seeking between $750 million to $850 million from investors. This potential raise comes amid a resurgence in crypto markets over recent months, as per Bloomberg’s report on April 3, citing sources familiar with the matter.
If successful, this raise would mark one of the largest in the crypto space since May 2022 when Andreessen Horowitz (a16z) secured a record $4.5 billion. Paradigm’s last significant raise was in November 2021, during the peak of the previous bull run, when it raised a $2.5 billion fund, the largest crypto fund at the time.
Earlier, The Information suggested Paradigm was aiming for a $1 billion fund, emphasising the firm’s ambitious growth plans. Paradigm has not responded for a request for comment yet.
Notable investments in the Web3 space include Coinbase, Fireblocks, Blast, Optimism, Uniswap, Gitcoin, and friend.tech.
Paradigm recently listed Merkle Manufactory — the firm behind the decentralised social network Farcaster — as unicorn status as its valuation surpassed the $1 billion mark in a Paradigm-led funding round.
The business also invested $278 million in the now-collapsed FTX. Just four days after Sam Bankman-Fried’s exchange filed for bankruptcy, the move led to a write-down of the firm’s investment to zero. Paradigm founder and managing partner Matt Huang said the firm felt “deep regret” for investing in a company that did “enormous damage to the ecosystem.” Nevertheless, this constituted only a small portion of Paradigm’s total assets.
The broader trend in VC fundraising for crypto projects saw a low of $445 million in October 2023, but recent months have seen consecutive increases, with March reaching $1.16 billion.
Infrastructure and decentralised finance (DeFi) sectors attracted the most funding in 2024, followed by nonfungible token (NFT) projects, which experienced a significant drop compared to the previous year.
This decline in NFT-related funding coincides with falling floor prices of major NFT collections like CryptoPunks and the Bored Ape Yacht Club. Despite these challenges, Paradigm’s ambitious fundraising efforts reflect continued confidence in the crypto space’s long-term potential.