News Flash - Paradigm launches $2.5 bn venture fund for crypto industry

Investment firm Paradigm has announced the launch of a $2.5 billion venture fund to invest in the next generation of crypto companies and protocols.

Matt Huang and Fred Ehrsam, who co-founded Paradigm in 2018 said, "Our conviction in these beliefs has only strengthened over the past three years, and we are pleased to announce a new $2.5 billion venture fund to continue investing in the next generation of crypto companies and protocols."

“This new fund will invest alongside our existing flagship fund across all stages and geographies,” they noted.

Huang & Ehrsam in their blog wrote, "Crypto was poised to be one of the most important technical and economic shifts over the coming decades with the potential to fundamentally change money, the financial system (DeFi), and the internet more broadly (Web3)."

The blog further reads, "Our mission at Paradigm remains unchanged: to be the earliest and most helpful partner to crypto entrepreneurs and communities. We’ll continue incubating ideas. We’ll continue investing at the earliest stages when there’s just a glimmer of an idea. We’ll also partner with later-stage category leaders, and support companies at every stage in between."

Ehrsam also co-founded the Nasdaq-listed crypto exchange Coinbase, whereas Huang was previously a partner at Sequoia Capital focusing on early-stage venture investments including leading the firm’s cryptocurrency efforts.

The two co-founders finished raising $2.5 billion this month for Paradigm One, their first venture capital fund. 

The fund raised by the duo is the largest new venture capital fund in history for the crypto space. though Ehrsam told Financial Times that as the target period is for ten years, the fund is relatively small. 

In addition to its size, the new crypto fund is indicative that crypto is the hottest technology frontier.

Even though in the past decade crypto has come a long way, it is still owned by less than 10% of the global population. Decentralized financial (DeFi) systems have grown to hold over $100 billion in cumulative assets, yet still represent a small fraction in the context of the traditional financial system. 

Web3 applications have grown to reach tens of millions of users, yet are still far away from the billions of Web2 users. 

Earlier this year, VC firm Andreessen Horowitz raised $2.2 billion for its new cryptocurrency fund, which at the time it said was the largest crypto fund ever raised.

Jagdish Kumar
Klever Writer
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