Paradigm launches $2.5bn fund for ‘next generation’ of crypto companies

16 Nov 2021

Image: © Sashkin/Stock.adobe.com

The VC, started by one of the founders of Coinbase, has launched what is said to be the largest crypto fund ever raised.

Paradigm has launched a new $2.5bn fund to back the “next generation of crypto companies and protocols”.

This crypto-focused VC was founded in 2018 by Matt Huang and Fred Ehrsam. Huang was previously a partner at Sequoia Capital and led its cryptocurrency investments, while Ehrsam was the co-founder of cryptocurrency exchange Coinbase, which went public earlier this year.

In a blog post this week, the Paradigm co-founders and managing partners wrote that the new fund and its size are “reflective of crypto being the most exciting frontier in technology”.

The San Francisco-based VC was established to invest in “disruptive” crypto companies, protocols and currencies, providing backing from $1m to more than $100m.

Specifically, the co-founders said they saw potential in this tech to fundamentally change money, change financial systems with decentralised finance (DeFi), and change the internet more broadly with decentralised Web3 applications.

Companies already in its portfolio include Coinbase, blockchain-based payment system Diem, and crypto finance player BlockFi.

Earlier this year, it led the $100m funding round for blockchain start-up Chainalysis and participated in cryptocurrency exchange Bitso’s $250m funding round.

Paradigm’s fresh $2.5bn fund is big news for the crypto investment space and is reported to be the largest crypto VC fund ever raised.

It beats the $2.2bn fund launched by Silicon Valley heavyweight Andreessen Horowitz earlier this year for investing in crypto networks, as part of a broader push to dominate in the crypto sector.

With its new mega fund, Paradigm said it will continue to back companies at different stages of growth, from “just a glimmer of an idea” to “later-stage category leaders”.

“We’ve immersed ourselves in the frontier of protocol research and the culture of Web3,” Huang and Ehrsam wrote.

“And we’ve built a team of domain experts around research, engineering, security, talent, communications and marketing, legal and policy, and everything else crypto entrepreneurs might need to advance their projects.”

The young VC now has around 30 employees, according to its website.

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Sarah Harford is sub-editor of Silicon Republic

editorial@siliconrepublic.com