Paradigm One, a venture capital firm run by Coinbase co-founder Fred Ehrsam and ex-Sequoia Capital Partner Matt Huang, has raised $2.5 billion (approximately Rs. 18,598 crores) for the “next generation of crypto companies and protocols,” making it the largest crypto VC fund. Paradigm One was founded in 2018 with an initial investment of $400 million (approximately Rs. 2,976 crores), and the total amount raised has surpassed the VC fund’s initial investment objective.
The size of Paradigm’s fund reflects investor expectations of a huge rise in the crypto business. “The magnitude of this new fund reflects the fact that cryptocurrency is the most intriguing frontier in technology.” “Crypto has gone a long way in the last decade,” Ehrsham and Huang said in a blog post on Monday. In the midst of record-breaking venture capital raising activities this year, the three-year-old startup’s fundraising surpasses VC firm Andreessen Horowitz’s $2.2 billion (approximately Rs. 16,370 crores) round earlier in 2021.
According to the company’s website, Paradigm invests in crypto companies of various sizes, from $100 million and up to $1 million (approximately Rs. 7.4 crores). According to Ersham and Huang, the fund would invest in businesses with “only a glimpse of an idea” as well as later-stage enterprises.
The decentralized finance (DeFi) industry and Web3 applications, which refer to apps developed on blockchain platforms, are two areas where the San Francisco-based investment group sees opportunities.
Ehrsam (who co-founded Coinbase) said in an interview with the Financial Times that token-based apps, in particular, have room to grow and that “decades into the future, it’s very clear the largest entities in the world will be powered by tokens,” just as the world’s largest Internet companies are currently powered by networks.
According to industry data source Pitchbook, venture capitalists pumped a record $21.4 billion (approximately Rs. 1,59,172 crore) into cryptocurrency and blockchain-focused startups across 1,196 deals in the first three quarters of 2021, a five-fold increase year-over-year.