Paradigm’s new $1.2 billion fund widens its bet beyond crypto

Paradigm has raised a $1.2 billion fourth fund, giving one of crypto’s best-known venture firms more capital to chase artificial intelligence, robotics and other frontier technologies. For retail investors, the move is a signal that startup funding is shifting toward companies where crypto, AI and autonomous hardware increasingly overlap.

The San Francisco-based firm said Wednesday the fund will invest in what it calls the “technical frontier,” while continuing to back digital-asset projects. Venture capital, or VC, is money invested in young private companies before they list on public markets or get acquired, so these bets can shape which technologies get funded years before everyday investors see them in stocks or liquid tokens.

Paradigm was founded in 2018 by Matt Huang and Coinbase co-founder Fred Ehrsam. It built its reputation as a major backer of crypto startups, but the new fund expands its mandate beyond digital assets.

AI is pulling venture money away from narrower crypto bets

The timing lines up with a broader funding shift. According to the Morning Minute newsletter by Tyler Warner, AI startups drew about 70% of global venture funding last quarter, while crypto deal counts have fallen sharply and Bitcoin is down roughly 30% this year.

Paradigm managing partner Alana Palmedo framed the expansion as a response to the number of investable technologies outside crypto. She told Bloomberg that crypto remains an exciting frontier, while adding that “there’s so much else happening right now that’s pretty hard to ignore.”

The firm has already put money into companies beyond crypto. Its portfolio includes drone-delivery company Zipline, valued at $7.6 billion, and space-defense startup True Anomaly, valued at $2.2 billion, according to the newsletter.

Paradigm says crypto is still part of the plan

Paradigm is not presenting the new fund as a retreat from crypto. The firm said its fourth fund will keep investing in crypto alongside AI, autonomous hardware and other emerging technologies.

Recent deals support that message. Paradigm co-led a $175 million round for Morpho in June, according to the newsletter. It also led a seed round this month for a startup focused on tokenized Treasuries, a structure that puts Treasury-linked assets on a blockchain. The firm also holds stakes in Kalshi and other prediction-market companies, where users trade contracts tied to future events.

Huang has argued that crypto and AI should not be viewed as a zero-sum competition, according to the newsletter. Paradigm is also evaluating AI opportunities with its existing technical team rather than creating a separate group for those deals.

The broader takeaway is that crypto-focused investors are stretching into markets where software, financial infrastructure and autonomous systems meet. That does not mean every AI or crypto startup will succeed. It does show that major private-market capital is being allocated across a wider technology set than the crypto-only cycle that defined much of the last several years.

This story draws on original reporting from Decrypt.