Paradigm Drops $1.2B Fund, Tells Crypto "We're Not Leaving, We're Just Expanding the Group Chat

Paradigm, the crypto venture firm founded in 2018 by Matt Huang and Coinbase co-founder Fred Ehrsam, has closed a $1.2 billion fund targeting AI, robotics and other "frontier" technologies while continuing to back digital-asset startups. The San Francisco-based firm confirmed the raise Wednesday, framing it as its fourth fund rather than a pivot away from the sector that made its name. "Crypto was the first frontier for us, and it continues to be a really exciting one, but there's so much else happening right now that's pretty hard to ignore," managing partner Alana Palmedo told Bloomberg.

The new vehicle follows a $2.5 billion crypto fund raised in November 2021, at the time the largest dedicated digital-asset vehicle, and an $850 million early-stage blockchain fund raised in 2024. Paradigm said it will continue investing across crypto stages and highlighted active positions including decentralized perpetuals exchange Hyperliquid, prediction market platform Kalshi and Tempo, a stablecoin-focused blockchain co-founded with Stripe. Internal crypto tools Foundry and Reth were also cited, alongside the AI-related projects EVMbench, built with OpenAI, and the AI-agent project Centaur.

Capital from the new fund has already been deployed outside crypto, including into autonomous drone delivery company Zipline International, valued at $7.6 billion in January, and space defense startup True Anomaly, valued at $2.2 billion in April. Other non-crypto bets include robotic metal fabrication platform SendCutSend and AI research lab Nous Research, creator of the open-source Hermes Agent model. Huang rejected the idea of rivalry between the sectors in a June 2023 X post, writing that the firm does not view AI and crypto as "a zero-sum competition" and expects "plenty of overlap" between the two.

The move comes as global venture funding hit a record $510 billion in the first half of 2026, according to Crunchbase data dated July 2, with AI companies capturing the largest share. OpenAI and Anthropic together accounted for more than 40% of H1 funding, while crypto startup investment reached $10.8 billion in the same period, per Cryptorank. Other crypto-focused firms have expanded similarly: Framework Ventures raised a $400 million fourth fund last month covering crypto, AI, robotics and energy, and Haun Ventures closed a $1 billion round in May that added AI to its mandate for the first time.

Paradigm remains active in crypto dealmaking, co-leading Morpho's $175 million raise in June and leading a seed round for a tokenized-Treasuries startup this month, while pointing to its crypto investment portfolio as evidence of continued commitment. The firm described the new fund's philosophy as investing in "steep exponentials" across AI, crypto, space, deep tech and energy, even as $BTC trades sharply lower year to date and broader crypto venture activity has cooled.