VC Firm Paradigm Is No Longer Crypto-Only

When looking at crypto-focused venture capital firms, it’s hard to find one more successful than Paradigm. The firm raised more than $2.5 billion in November of 2021, deploying money into some notable deals such as:

• Coinbase, the largest US exchange, now valued at $14 billion.

• Flashbots, the leading Miner Extractible Value (MEV) R&D organization, now valued at ~$1 billion.

• OpenSea, the world’s dominant NFT exchange, now valued at $3 billion.

• And countless DeFi mainstays, including MakerDAO, Compound, Cosmos, Uniswap, and Synthetix.

In addition to their very profitable portfolio, Paradigm is also known for their prolific writings and contributions to the wider crypto ecosystem.

Because of these factors and their sole dedication to crypto, Paradigm is widely regarded as one of the premier VC firms in the space

But this might be changing.

For the first time in their 5-year history, Paradigm is investing in technologies other than crypto. These new investments will center most notably around AI, the current apple of VC’s eyes.

It’s a stunning shift for an investment outlet that made their name in crypto, but it’s not as surprising when you zoom out and take a look at the overall funding atmosphere:

• Overall VC funding is way down (53% lower than in Q1 2022, despite massive investments into OpenAI and Stripe).

• The crypto industry is still recovering from the brutal losses of 2022 as well as regulatory uncertainty.

• The parties recovering include Paradigm and their $290 million loss in FTX.

• The result has been a massive 80% decline in VC funding for crypto companies from the peak of Q1 2022.

And that is why an investor in “disruptive crypto/web3 companies” is now a “research-driven technology investment firm” looking to throw money into AI.

Ultimately, VC firms are in the business of making money. We will likely continue to see VCs shift their attention elsewhere until crypto can once again prove to be profitable.