Paradigm, an investment company, has launched a $2.5 billion venture fund to invest in next-generation crypto companies and protocols. The company believes that “the new fund and its size reflect that encryption technology is the most exciting technological frontier.”

2.5 billion U.S. dollar crypto industry fund

Investment company Paradigm announced on Monday the launch of a $2.5 billion venture fund to invest in next-generation crypto companies and protocols. Matt Huang and Fred Ehrsam, who co-founded Paradigm in 2018, explained:

Our belief in these beliefs has grown stronger in the past three years, and we are pleased to announce the establishment of a new 2.5 billion USD venture fund to continue investing in the next generation of crypto companies and protocols.

They pointed out: “This new fund will invest in all stages and regions together with our existing flagship fund.”

Ehrsam also co-founded Coinbase, a cryptocurrency exchange listed on the Nasdaq. Huang was previously a partner of Sequoia Capital, focusing on early-stage venture capital, including leading the company’s cryptocurrency work.

The two co-founders raised $2.5 billion this month for their first venture capital fund, Paradigm One. According to the British “Financial Times” report, the funds raised are twice their initial target amount. Nonetheless, Ehrsam told the publication, “This may be small relative to where we are going in the next 10 years.”

The publication pointed out that this is the largest new venture capital fund in the history of the crypto field. Earlier this year, venture capital firm Andreessen Horowitz raised $2.2 billion for its new cryptocurrency fund, which it said at the time was “the largest crypto fund ever raised.”

Paradigm’s first fund has a structure similar to a hedge fund, which raised US$400 million in initial capital in 2018. According to data seen by the British “Financial Times”, its annual internal rate of return in the first half of this year exceeded 200%. The fund’s assets have reached 10 billion U.S. dollars.

Ehrsam and Huang further elaborated:

This new fund and its size reflect that encryption technology is the most exciting technological frontier. In the past ten years, encryption technology has made great strides.

However, they emphasized, “The journey has just begun, and the potential of encryption has never been clearer.”

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