Paradigm raises $1.2 billion fund, expands into AI and robotics

Paradigm, the crypto-focused venture capital firm, has raised $1.2 billion for its third dedicated venture fund — the fourth fund the firm has raised overall — with the stated aim of investing in what founder Matt Huang calls the “technical frontier,” Huang announced Wednesday. For Paradigm, that technical frontier stretches beyond the firm’s cryptocurrency investment roots: the new fund is expected to expand Paradigm’s investment focus to include robotics and artificial intelligence as well. The shift is not entirely surprising — the AI market has grown increasingly hot over the past few years, even as crypto itself has faced challenges.

In a blog post, Huang and managing partner Alana Palmedo wrote that Paradigm is not abandoning crypto. The firm will “continue investing in crypto and the reinvention of markets and the financial system,” the pair wrote, and will keep researching and building wherever it accelerates the industry — citing blockchain tools such as Foundry and Reth, agent tools like Centaur, and security research such as EVMbench, built in collaboration with OpenAI. Even so, AI and robotics are now explicit priorities for the firm. “There’s so much else happening right now that’s pretty hard to ignore,” Palmedo told Bloomberg in an interview.

The new vehicle, formally Paradigm’s Fund III, has already made several investments, including in drone-delivery company Zipline and space startup True Anomaly — both outside the firm’s traditional crypto focus.

Paradigm was founded in 2018 by Huang, a former partner at the venture firm Sequoia, and Fred Ehrsam, who co-founded the cryptocurrency exchange Coinbase. According to filings with the SEC (the US securities regulator), the firm filed to raise the new fund earlier this year. Its final size came in slightly below the $1.5 billion Paradigm was reportedly seeking to raise for the vehicle, as the Wall Street Journal reported in February.

Why it matters

Paradigm’s expansion into AI and robotics tracks how much capital and attention the AI market has drawn in recent years, even as crypto itself has faced challenges. For a venture firm built on crypto investing, broadening the mandate this way signals that the “technical frontier” it’s chasing now sits as much in AI and robotics as in blockchain.