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Report: Crypto-Focused VC Firm Paradigm Working to Raise New Fund

Crypto investments, venture capital

Crypto-focused venture capital (VC) firm Paradigm is reportedly working to raise between $750 million and $850 million for a new fund.

The company is currently in talks with investors, Bloomberg reported Tuesday (April 2), citing unnamed sources.

Paradigm did not immediately reply to PYMNTS’ request for comment.

In 2021, the firm raised what was the largest crypto fund ever at the time, with $2.5 billion, according to the report.

If Paradigm raises $750 million in its current effort, that would be the biggest fund seen in the crypto VC industry since the sector’s crash, according to the report.

Since the industry’s high point in May 2022, when Andreessen Horowitz raised a $4.5 billion fund, the industry dropped along with digital asset prices, the report said.

It was reported in January that VC investment in the crypto industry plummeted to just $9.5 billion in 2023, less than a third of the previous year’s total. Scandal and regulatory issues took a toll on fundraising efforts.

Now, with crypto making a comeback, more VC firms are looking to raise funds, per the Tuesday report by Bloomberg. For example, Hivemind Capital is raising a $50 million non-fungible token (NFT) fund and Hack VC is aiming to raise at least $100 million after announcing a $150 million fund in February.

When Hack VC announced on Feb. 20 that it raised $150 million for Web3 and financial infrastructure investments, Managing Partner Alex Pack said Web3 is in a pivotal moment.

“With millions of users and regulatory clarity emerging across the world, it is clear that Web3 is here to stay,” Pack said. “Yet, like the early days of the internet, Web3 still requires an infrastructural paradigm shift in scalability, security and usability before it is ready for mainstream usage.”

VC investors, across both crypto and artificial intelligence (AI), appear to be focused more on infrastructure plays than in the past, PYMNTS reported in February when comparing the VC money flows in 2024 and beyond to those in crypto’s heyday of 2021.

Funding is being directed much less to service providers in favor of building foundational ecosystems.