Paradigm raises $1.2 billion for fourth fund and expands mandate into AI and robotics

Paradigm, the crypto-focused venture firm, said it raised $1.2 billion for its fourth fund and is broadening its mandate beyond crypto into AI, robotics and other technical-frontier areas.

The raise is a notable signal from one of crypto’s best-known investors that the frontier of returns now runs through AI and hardware. It came in below target: the firm had reportedly been seeking $1.5 billion, and the fund closed about 20% short of that figure.

Founder Matt Huang and managing partner Alana Palmedo said the firm will keep investing in crypto and financial-system infrastructure while pushing into the new areas, Paradigm said. As evidence it already invests beyond tokens, the firm pointed to existing Fund III bets including drone-delivery company Zipline and space startup True Anomaly.

Paradigm was founded in 2018 by Huang, a former Sequoia Capital partner, and Fred Ehrsam, a Coinbase co-founder, and built its name on early crypto positions. The expansion puts it in direct competition with generalist and AI-specialist funds for the same deals.

The widened mandate is a statement of intent more than a track record; Paradigm has yet to show AI and robotics wins on the scale of its crypto returns, and coming in short of the $1.5 billion target suggests limited-partner appetite has limits. How much of Fund IV actually lands in AI and robotics, versus staying in the crypto deals the firm knows best, will show whether this is a real pivot or a hedge.