On June 13, Paradigm, a venture capital firm specializing in cryptocurrency, announced that it had successfully raised $850 million for its third fund.
The fund targets early-stage projects and reflects Paradigm's continued belief in the transformative potential of the cryptocurrency industry.
Paradigm’s Latest Fund: Cryptocurrency Market Rebound
Paradigm emphasized its belief in the technological and economic transformation of cryptocurrencies, which has become stronger over the past six years. They focused on the monetization of Bitcoin, which has surpassed $1 trillion, and the expansion of blockchains such as Ethereum and Solana. It also noted the global adoption of stablecoins.
It also demonstrated the rapid advancement of frontier research and the emergence of new infrastructure that enables consumer applications. He also noted that hundreds of millions of people now own cryptocurrencies, and that the sector is playing a key role in the global political arena .
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Bloomberg reported that discussions about Paradigm's third fund have been ongoing since April. At the time, Paradigm reportedly discussed with investors the prospect of raising between $750 million and $850 million . These developments signal a rebound in the cryptocurrency market, positioning Paradigm's fund as one of the largest since the cryptocurrency market's downturn.
Paradigm co-founder Matt Huang said accelerating the positive future of cryptocurrency is more important than ever. He emphasized the role of paradigms not only as investors but also as builders.
“Over the past few years, we have worked to advance the cryptocurrency space by launching several open source projects, including Foundry, a popular Ethereum development tool, and Res, a high-performance Ethereum execution node. We are excited to be able to put significant effort into these projects over the next few years,” Huang explained .
In addition to Paradigm, venture capital giants such as Galaxy Digital also announced large-scale funds for the cryptocurrency industry this year. Last April, Galaxy Digital unveiled a new $100 million fund, Galaxy Ventures Fund I, LP. The fund aims to support up to 30 promising early-stage cryptocurrency startups within the next three years.
Paradigm's latest move is consistent with a broader trend among venture capitalists . A recent report from Galaxy Digital Research found that approximately 80% of capital was invested in early-stage companies in the first quarter of 2024. Meanwhile, the remaining 20% was invested in later-stage companies.
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The report noted that early-stage venture funds focused on cryptocurrencies remain active, with many funds not yet using the funds raised through fundraising in 2021 and 2022. This ensures that attractive early-stage companies can still raise capital.
However, many large general venture capital firms have withdrawn from this field or significantly reduced their investment scale. This has made it more difficult for late-stage startups to raise funding. Additionally, on the deals side, the share of pre-seed deals increased slightly in the first quarter, suggesting some growth in newly established startups.
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