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Paradigm, one of the largest venture capital firms in the crypto space, is gearing up to reenter the crypto VC arena. According to reports, the firm is in talks with third parties to launch a $750 – $850 million crypto-focused investment fund, the largest since its previous $2.5 billion venture fund launched in 2021.
Due to favorable market conditions, venture capital (VC) firms are warming up to crypto again. Paradigm, one of the largest players in the crypto VC arena, is reportedly in talks with partners to raise between $750 and $850 million to launch a new crypto-based fund.
The move, if completed, would constitute the company’s return to its crypto roots, after having shifted to alternative industries such as artificial intelligence. This fund would be the largest one of the company since the launch of a behemoth $2.5 billion fund in 2021.
The details on the fund’s conditions and the stage of the crypto projects that will be targeted are still scant.
Many are seeing this possible move as a return to trust in the crypto environment after the firm was embroiled in the downfall of FTX. Paradigm invested close to $280 million in the exchange, with CEO Matt Huang stating that he “deeply regretted” having invested the large amount in the company. The exact investment of Paradigm on FTX is still unknown, but it was written down to zero.
However, Paradigm kept investing in new crypto opportunities even after facing this loss. In March 2022, the company co-led a $150 million Series B funding round for Optimism, an Ethereum rollup. In November, it led a $20 million funding round for Blast, a layer scaling solution for Ethereum.
Other venture capital firms are also returning to crypto. Hivemind Capital is raising $50 million for a non-fungible token (NFT) focused fund. Hack VC, is seeking to raise $100 million to launch a crypto fund after announcing a $150 million fund in February.
