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Paradigm Secures $850M for New Early-Stage Crypto Investments

Hassan Shittu
Last updated: | 2 min read
Paradigm Launches $850M Third Venture Fund for Early-Stage Crypto Projects

Paradigm, a leading venture capital firm in the crypto space, has announced the close of its third venture fund, a substantial $850 million initiative to support early-stage crypto projects.

Founded in 2018, Paradigm has maintained a strong belief in the transformative potential of crypto technology. “Six years later, that belief has only gotten stronger,” the company stated, highlighting the rapid advancements and widespread adoption of cryptocurrencies.

Paradigm Announces Historic Fundraise to Drive Crypto Innovation and Early-Stage Projects

Paradigm has been in talks about this new fund over the past few months, particularly following the resurgence in crypto markets. According to an announcement made on June 13, the company has successfully closed an $850 million investment fund, marking it as one of the largest crypto fund raises to date.

Paradigm’s notable investments include Uniswap, which revolutionized decentralized exchanges through the use of Automated Market Makers (AMMs), Optimism, which developed a leading model for blockchain scaling, and Flashbots, which redefined block building through the concept of Miner Extractable Value (MEV).

However, the firm also experienced setbacks, such as the $278 million investment in the now-defunct crypto exchange FTX, which was written down to zero in November 2022.

Despite the setbacks, the company’s focus on pioneering early-stage work continues, with Paradigm emphasizing its commitment to investing in early-stage crypto projects. In addition to its investment activities, Paradigm is dedicated to building a positive future for the crypto industry.

“It’s more important than ever to accelerate a positive future for crypto, not just as investors but as builders.”

Crypto Investments See Uptick in Q1 2024

In 2021, Paradigm secured a $2.5 billion fund, which was then the largest crypto investment fund. Reports from The Information in September indicated that Paradigm was aiming for a $1 billion fund raise at that time.

According to data compiled by Galaxy Research, investors injected $2.49 billion across 603 deals in the first quarter of 2024. This marks a 29% increase in funding and a 68% rise in deals compared to the previous quarter.

This increase in investment activity suggests a potential recovery after several quarters of decline. The report notes, “This was the first rise in both capital invested and deal count in 3 quarters, perhaps signaling that Q4 2023 was the ‘bottom,’ although a continuation of QoQ increases — and a more meaningful increase — would confirm that over the coming quarters.”

The report added that the infrastructure sector dominated investment activity, securing 24% of the total capital raised during the quarter, highlighted by EigenLayer’s impressive $100-million funding round. The Web3 and trading sectors were also significant contributors, capturing 21% and 17% of the total capital, respectively.