Crypto VC Paradigm Looks To Raise $750M For Investments

The recent rebound in cryptocurrency prices ignited a fresh wave of fundraising activity among venture capitalists, with Paradigm, a leading crypto-focused investment firm, reportedly in discussions to secure a new fund valued between $750 million and $850 million.

What Happened: This ambitious endeavor is spearheaded by Coinbase Global Inc. COIN co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang, Bloomberg reported.

Should Paradigm’s fundraising efforts culminate at the lower end of their target, the $750 million fund would mark a significant milestone as the largest in the industry since its recent downturn.

This development followed the record-setting $4.5 billion fund raised by Andreessen Horowitz in May 2022, before the sharp decline in digital asset values challenged the industry’s recovery efforts.

Paradigm’s fundraising history included a $2.5 billion fund raised in 2021, a testament to its storied past and bullish outlook on crypto’s future.

Despite aiming for a $1 billion fund as reported last September, Paradigm remained tight-lipped about its current fundraising activities.

The firm’s journey over the past year has been notably dynamic.

It faced scrutiny last summer for briefly shifting its online focus away from crypto towards artificial intelligence, a move that was quickly reversed amidst community feedback.

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Additionally, a significant leadership shift occurred in October, with Ehrsam transitioning from managing partner to general partner, around the same time Huang testified in the high-profile trial of FTX co-founder Sam Bankman-Fried, who was recently sentenced to 25 years in prison.

Paradigm’s involvement with FTX became a focal point of controversy after it was revealed the firm invested $278 million in the exchange, later writing off the investment amidst fraud allegations.

The firm is now embroiled in a class-action lawsuit alongside other notable investors, accused of lending credibility to FTX.

Despite these challenges, Paradigm has not wavered in its commitment to the crypto sector, leading significant investments such as the one in Merkle Manufactory, the creators behind Farcaster social media network, valuing the startup at about $1 billion.

This flurry of activity in venture capital circles is indicative of a broader trend, as evidenced by other firms like Hivemind Capital and Hack VC, which are also on the fundraising trail for crypto-focused investments.

What’s Next: These developments are likely to be a hot topic at the upcoming Benzinga’s Future of Digital Assets conference on November 19, where industry insiders will converge to discuss the future trajectory of digital assets.

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