The company, co-founded by Coinbase co-founder Fred Ehrsam and former Sequoia partner Matt Huang, is looking to capitalize on institutional investor interest in the space as the bear market in VC investing ends. It is said that
This is the largest new crypto VC fund raised since last year's market downturn, according to an April 3 Bloomberg report citing anonymous sources.
Cryptocurrency VC funding peaked in May 2022, when venture firm Andreessen Horowitz (a16z) raised $4.5 billion.
Comeback of virtual currency VC
Paradigm previously raised a record $2.5 billion in crypto funds at the peak of the 2021 bull market. However, the company faced scrutiny last year for appearing to downplay and scale back its cryptocurrency efforts on its website as it focused on AI.
Additionally, the company invested $278 million in FTX before pulling it down to zero after the exchange's collapse, as part of a lawsuit that claims it gave “legitimacy” to the embattled platform. It has become.
Despite these setbacks, Paradigm has continued to support crypto projects, including leading a $1 billion investment round in the software that powers decentralized social media platform Farcaster.
In addition to Paradigm, Mike Novogratz's Galaxy Digital has also raised $100 million in a crypto venture fund, according to Bloomberg.
Previously, the company invested its own funds in various cryptocurrencies, infrastructure, and DeFi startups. However, in 2023, Galaxy Digital opened Galaxy Ventures Fund I to outside investors.
The company said in a statement on April 3:
“For years, we have committed our own funds to supporting these innovators. Now, we are launching Galaxy Ventures Fund I LP to partner with external investors and By supporting companies at this stage, we can continue to strengthen the digital asset ecosystem.”
Hivemind Capital raises $50M NFT fund, Hack VC announced $150M fund in February, looks to raise another $100M in another investment vehicle, kicking off crypto VC season seems to be arriving.
Outlook for the VC ecosystem
According to Wu Blockchain's monthly summary, there were a total of 180 investment projects announced in the crypto venture capital field in March. This number is a 24% increase from February 2024.
Additionally, total loans in March were $1.16 billion, an increase of 53% from the previous month.
The Optimism Foundation on the Ethereum Layer 2 network achieved its largest fundraising of $89 million by selling 19.5 million OP tokens to retail investors.