KEY POINTS
- It would be the largest crypto-focused fund yet since Andreessen Horowitz's $4.5 billion in 2022
- Paradigm's largest funding drive was in November 2021 at $2.5 billion
- Paradigm has invested in Coinbase, Chainalysis, Blast and Magic Eden
Web3 venture firm Paradigm is reportedly in talks with various investors to raise up to $850 million for a new cryptocurrency venture fund that, if successful, would be the largest fundraising project since venture capital firm Andreessen Horowitz raised a record $4.5 billion in May 2022.
Paradigm is in discussions to raise between $750 million and $850 million for a new fund, Bloomberg reported Tuesday, citing people familiar with the matter who spoke on condition of anonymity due to the talks' private nature.
The research-driven tech investment firm that focuses on the web3 ecosystem has previously led various fundraisers for cryptocurrency startups. Its latest fundraising activity was with Succinct Labs, which had a $55 million financing round.
Its biggest project was back in November 2021, when it announced a $2.5 billion venture fund to help grow "the next generation of crypto companies and protocols." At the time, Paradigm co-founders Matt Huang and Fred Ehrsam said, the fund and its size "are reflective of crypto being the most exciting frontier in technology."
Among Paradigm's most notable crypto-related investments include crypto exchange Coinbase, layer-2 blockchain Blast, blockchain analytics firm Chainalysis, crypto native infrastructure Conduit, blockchain application platform Cosmos, Bitcoin mining firm Genesis Digital Assets, nonfungible token marketplace Magic Eden, and decentralized finance (DeFi) options protocol Opyn.
It is worth noting that Paradigm also invested a staggering $278 million in Sam Bankman-Fried's fallen crypto exchange FTX. Four days after the exchange filed for bankruptcy, Paradigm wrote its investment down on the former crypto darling's company to zero.
If Paradigm hits the $850 million fund, it would be one of the largest funding initiatives for the web3 ecosystem so far. Andreessen Horowitz led the pack in May 2022 when it raised $4.5 billion for digital currency investments. It was the VC titan's fourth crypto-related fund.
The report comes at a crucial time in the crypto sector – Bitcoin, the world's largest decentralized cryptocurrency by market cap, has been on a significant three-month bull run, and VC funding was on a roll last month.
In March, there were dozens of funding rounds within the web3 ecosystem, as per data from crypto projects data provider RootData. Among the biggest funding rounds last month were Ethereum (ETH) layer-2 solution Optimism ($89 million), open source cryptography firm Zama ($73 million), blockchain platform Berachain ($69 million), crypto exchange Figure Markets ($60 million), and layer-1 launch platform Eclipse ($50 million).
