Paradigm To Raise $850M In Biggest Fundraise Since Crypto Winter

Crypto venture capital firm Paradigm has hinted at plans to raise up to $850 million for a new fund, marking a major comeback since the unfortunate crypto winter that hit the industry in 2022.

Crypto VC Funding Getting New Lease of Life

Paradigm, a Venture Capital firm founded by Coinbase Global Inc. co-founder Fred Ehrsam and ex-Sequoia Capital Partner Matt Huang, claimed to be in conversations with potential investors about raising between $750 million – $850 million. 

Before the crypto winter, the crypto-based VC was reckoned as one of the biggest players in the thriving industry. If the funding round is successful, even at the lower end of the range, it will be the largest the industry has seen since the crypto winter.

Notably, May 2022 was a crucial point for crypto VC fund raising as Andreessen Horowitz (a16z) secured up to $4.5 billion in funds. Even Paradigm raised $2.5 billion fund in 2021. However, the euphoria of these VC funding was shortlived as there was a steep downturn in digital asset prices, which eventually brought the crypto industry to one of its lowest levels.

 While Paradigm has declined to comment on the new fund, the move suggests that crypto VC funding is gradually recovering from the crypto winter. 

Paradigm and its Many Headwinds

Apart from the industry-wide harsh market conditions of 2022, Paradigm also had an eventful 2023. Probably in a bid to expand its services, the company updated its website and removed all mentions of crypto, while portraying a new interest in artificial intelligence (AI). Unfortunately, Paradigm received several backlash for taking such actions until it was forced to return the website to what it looked like previously. 

Around the same time, Ehrsam resigned from his position as managing partner and became a general partner. In October, one of the co-founders Huang testified at the trial of FTX co-founder Sam Bankman-Fried, who was recently sentenced to 25 years in prison after he was found guilty of seven charges levied against him.

It is worthy of note that all of these setbacks have not deterred the VC from supporting crypto projects. Generally, the last few months has been good to the crypto VC landscape as it has seen a surge in the funding of projects. 

According to figures from RootData, VC funding for crypto projects surged 52.5% month-over-month in March.