Paradigm prepares to raise up to $850M, largest crypto fund since 2022

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Crypto-focused venture capital firm Paradigm is reportedly in talks to raise between $750 million to $850 million in new funding.

Bloomberg initially reported on the preparations for this fund. In the report, Bloomberg quotes sources who point to the recent resurgence in the crypto market as one of the primary factors in the firm’s decision.

Paradigm describes itself as a “research-driven technology investment firm” and was founded by Coinbase co-founder Fred Ehrsam, along with former Sequoia Capital partner Matt Huang. The venture capital firm ranks as one of the most prominent venture capital firms backing crypto, alongside Andreessen Horowitz, Digital Currency Group, and Pantera Capital, among others.

While Paradigm has been supporting crypto in the past few years, it also received criticism for a perceived lack of commitment to the industry. In October 2023, Ehrsam relieved himself of his role a managing partner in the firm to become a general partner, while Huang testified at the trial of FTX co-founder Sam Bankman-Fried, who was recently sentenced to 25 years in prison. There have also been talks that the venture capital firm has been slowly pivoting towards investments in artificial intelligence.

As for its previous investments with FTX, Paradigm has since marked down its stake to zero, although it had earmarked some $278 million for the now-defunct exchange. This led to the firm being included in a class-action lawsuit filed by FTX investors who alleged that the firm’s investments (alongside Sequoia Capital and Thoma Bravo) provided an unnecessary “air of legitimacy” to FTX.

To date, the proposed amount of up to $850 million in funding stands as the largest in the crypto industry since the most recent bear cycle which began sometime in mid-2022. This follows the raise from Andreessen Horowitz in May of that year which saw $4.5 billion in funding come in.

Prior to this, Paradigm was also able to raise $2.5 billion in 2021, a record number at the time. This most recent plan to raise new venture capital is possibly in continuation with what was reported in September of last year, wherein Paradigm was said to be raising $1 billion. There has been no confirmation regarding this connection.

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