Paradigm Launches $850 Million for Early Crypto Projects Amid Market Recovery

On June 13, crypto-focused venture capital firm Paradigm announced the successful raising of $850 million for its third fund.

This fund targets early-stage projects, reflecting Paradigm’s continued belief in the crypto industry’s transformative potential.

Paradigm’s Latest Fund: A Rebound in the Crypto Market

Paradigm emphasized its belief in the significant technical and economic shift that crypto represents, which has grown stronger over the past six years. They pointed to Bitcoin’s monetization to over $1 trillion and the scaling of blockchains like Ethereum and Solana. Moreover, they noted the global adoption of stablecoins.

Furthermore, the firm also highlighted the rapid progress in frontier research and the emergence of new infrastructure enabling consumer applications. It noted that hundreds of millions of people now own crypto, making this segment a key player on the global political stage.

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Bloomberg reported that discussions about Paradigm’s third fund have been circulating since April. At that time, Paradigm reportedly discussed with investors the prospects of raising between $750 million and $850 million. This development signifies a rebound in the crypto market, positioning Paradigm’s fund as one of the largest since the crypto market’s previous downturn.

Matt Huang, co-founder of Paradigm, stated that accelerating a positive future for crypto is more important than ever. He emphasized Paradigm’s role not just as investors but as builders.

“Over the past few years, we’ve launched several open-source projects, including Foundry, a popular Ethereum development tool, and Reth, a high-performance Ethereum execution node, with the goal of pushing the crypto frontier forward. We’re excited to dedicate significant effort to such projects over the coming years,” Huang outlined.

In addition to Paradigm, other venture capital giants like Galaxy Digital have also announced significant funds for the crypto industry this year. In April, Galaxy Digital unveiled a new $100 million fund named Galaxy Ventures Fund I, LP. This fund aims to back up to 30 promising early-stage crypto startups within the next three years.

Paradigm’s latest move aligns with the broader trend among venture capitalists. A recent report from Galaxy Digital Research revealed that in Q1 2024, about 80% of the capital went to early-stage companies. Meanwhile, the remaining 20% went to later-stage companies.

Read more: Crypto Hedge Funds: What Are They and How Do They Work?

Early-Stage Investments Lead Crypto VC Trends. Source: Galaxy Digital Research

The report noted that crypto-focused early-stage venture funds have remained active, with many still sitting on dry powder from their 2021 and 2022 fundraises. This allows compelling early-stage firms to still source funding.

However, many large generalist venture capital firms have exited the sector or dramatically reduced their exposure. This has made it more difficult for later-stage startups to raise funds. Additionally, on the deal side, the share of pre-seed deals increased modestly in Q1, suggesting some growth in newly founded startups.

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