Paradigm's Ambitious New Fund

Crypto-focused venture capital firm Paradigm has raised $850 million for a fund to invest in early-stage Web3 projects.

Paradigm emphasized its belief in the significant technical and economic shift that crypto represents, which has grown stronger over the past six years. They pointed to Bitcoin's monetization to over $1 trillion and the scaling of blockchains like Ethereum and Solana. Moreover, they noted the global adoption of stablecoins.

Driving Innovation and Adoption

Furthermore, Paradigm highlighted the rapid progress in frontier research and the emergence of new infrastructure enabling consumer applications. It noted that hundreds of millions of people now own crypto, making this segment a key player on the global political stage.

Paradigm's latest move aligns with the broader trend among venture capitalists focusing on early-stage ventures.

Bloomberg reported that discussions about Paradigm's third fund have been circulating since April. Paradigm reportedly discussed with investors the prospects of raising between $750 million and $850 million at that time. Paradigm's fund is one of the largest since the crypto market's previous downturn.

Paradigm's Vision and Projects

Matt Huang, co-founder of Paradigm, stated that accelerating a positive future for crypto is more critical than ever. He emphasized Paradigm's role not just as investors but as builders.

"Over the past few years, we've launched several open-source projects, including Foundry, a popular Ethereum development tool, and Reth, a high-performance Ethereum execution node, to push the crypto frontier forward. We're excited to dedicate significant effort to such projects over the coming years," Huang outlined.

Market Trends and Comparisons

In addition to Paradigm, other venture capital giants like Galaxy Digital have announced significant crypto industry funds this year.

Galaxy Digital unveiled a new $100 million fund named **Galaxy Ventures Fund I, LP ** in April. This fund aims to back up to 30 promising early-stage crypto startups within the next three years.

A recent report from Galaxy Digital Research revealed that in Q1 2024, about 80% of the capital went to early-stage companies. Meanwhile, the remaining 20% went to later-stage companies.

This report noted that crypto-focused early-stage venture funds have remained active, with many still sitting on dry powder from their 2021 and 2022 fundraises. This allows compelling early-stage firms to source funding still.

However, many large generalist venture capital firms have exited the sector or dramatically reduced their exposure, making it more difficult for later-stage startups to raise funds.

Additionally, on the deal side, the share of pre-seed deals increased modestly in Q1, suggesting some growth in newly founded startups.