You’ve probably seen the memes of the “pivot from Web3 to A.I.,” jesting that venture capital investors have ditched the old hot new thing, crypto, for the new hot new thing, artificial intelligence. For some crypto-focused VCs, like Paradigm, the allure of A.I.—and a potential shift in their interests—has sparked some backlash.
The firm, started by Coinbase cofounder Fred Ehrsam and former Sequoia Capital partner Matt Huang, recently erased all mention of crypto or Web3 from its website homepage—branding previously touted front and center—as crypto news site The Block spotted in late May. The report caught the attention of my colleague Leo Schwartz and me, and we decided to dig a bit deeper. We discovered that it wasn’t just Twitter users who were raising eyebrows over the changes. As we reported:
One [Paradigm] LP, who spoke to Coins2Day on the condition of anonymity, said the public changes to its website—and any potential shift in investing focus—were not conveyed to them. Paradigm is “notoriously bad [at] LP relationships, unfortunately,” they said.
Notably, the fund also does not have a dedicated investor relations employee, with COO [Alana] Palmedo handling the responsibility. Meanwhile, a Paradigm portfolio company founder also told Coins2Day that, to their knowledge, the firm didn’t communicate changes to the site to its companies.
Another founder of a Paradigm portfolio company, who requested anonymity to speak freely, said the decision felt “weird” to them.
“If a new founder asks me whether they should raise from [Paradigm], I would be like, maybe that’s not at the top of the list anymore,” they said. “They’re just not focused on it, and it does feel a little like, ‘Hey, we invested in all this stuff, but actually we don’t care anymore,’ which is probably why they’re trying to say it’s a non-change.”
To be clear, Paradigm insists they’re not shifting the firm’s focus from crypto to A.I. As Palmedo, the COO, told us, “The new website language emphasizes the research-driven approach Paradigm has always had and doesn’t reflect a pivot away from crypto.” And Huang wrote in a tweet this month that “We haven’t dropped crypto…some of our research team has been tinkering with AI and AI x crypto.” He also elaborated in a lengthier tweet this week that the firm has “never been more dedicated to crypto.” Indeed, Paradigm is still penning research on crypto, although the firm has only announced a couple crypto deals in 2023.
Some of Paradigm’s other portfolio company founders are shrugging off the event, while one Paradigm founder, Dee Goens, cofounder and COO of NFT creation platform Zora, doesn’t think “there’s a VC firm in the space that has a better overall purview of crypto than Paradigm.”
You can read the whole story here, but I’d wager we’ll see more such statements and tweets from crypto VCs highlighting the promise of A.I. Technology—and how it overlaps with crypto—in the coming months.
See you tomorrow,
Anne Sraders
Twitter: @AnneSraders
Email: [email protected]
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Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- Typeface, a San Francisco-based generative A.I. Platform for enterprise content creation, raised $100 million in Series B funding. Salesforce Ventures led the round and was joined by Lightspeed Venture Partners, Madrona, GV, Menlo Ventures, and M12.
- Augmedics, an Arlington Heights, Ill.-based augmented reality surgical navigation company, raised $82.5 million in Series D funding. CPMG led the round and was joined by Evidity Health Capital, H.I.G. Capital, Revival Healthcare Capital, Almeda Ventures, and others.
- Fly.io, a remote-based app delivery network company, raised $70 million in Series C funding. EQT Ventures led the round and was joined by Andreessen Horowitz, Dell Capital, and Intel Capital.
- Betr, a Miami-based sports betting and media company, raised $35 million in Series A2 funding. IA Sports Ventures, Eberg Capital, and Fuel Venture Capital co-led the round and were joined by Joey Levy, Anti Fund, FinSight Ventures, Florida Funders, and Aliya Capital Partners.
- Venn Software, a New York-based remote work security provider for employees, raised $29 million in Series A Funding led by NewSpring.
- Ramon.Space, a Los Altos, Calif.-based computing infrastructure platform for space, raised $26 million in funding. Ingrasys, the Strategic Development Fund, Grove Ventures, Deep Insight, and UMC Capital invested in the round.
- Parabola, a San Francisco-based workflow automation and documentation platform, raised $24 million Series B funding. OpenView led the round and was joined by Matrix, Thrive Capital, and others.
- Bdeo, a Madrid-based visual intelligence platform for the insurance and fleet industries, raised €7.5 million ($8.19 million) in funding. Armilar, Hollard, Spain's Centre for the Development of Industrial Technology, Íope Ventures, K Fund, and Blackfin Tech invested in the round.
- Scriptic, a London-based phone-focused show creator, raised $5.7 million in a second close of its seed round. BITKRAFT Ventures led the round and was joined by Tower 26, the Amazon Alexa Fund, and others.
- Dalan Animal Health, an Athens, Ga.-based bee vaccine developer, raised $4.5 million in seed 3 funding. Prime Movers Lab led the round and was joined by At One Ventures.
- Patented.ai, a San Francisco-based intellectual property software company, raised $4 million in pre-seed funding. Baseline Ventures’ Steve Anderson led the round and was joined by Boston Seed Capital’s Nicole Stata, Accomplice’s Jeff Fagnan, and others.
- AuditMate, a San Francisco-based elevator and escalator service contract management software platform for building owners and managers, raised $3.5 million in seed funding. MassMutual Ventures led the round and was joined by Moderne Ventures, Blue Field Capital, and others.
- JustPaid, a Mountain View, Calif.-based financial tools provider, raised $3.5 million in seed funding. Kleiner Perkins partner Mamoon Hamid, Rebel Fund, and others invested in the round.
- 32Co, a London-based dentistry health tech startup, raised $3 million in seed funding led by Balderton Capital.
- Glowb, a London-based residential solar startup, raised £1.2 million ($1.52 million) in funding. Ada Ventures led the funding and was joined by Active Partners, Voyagers Climate-Tech Fund, and Volta Circle.
PRIVATE EQUITY
- Silver Lake, the Canada Pension Plan Investment Board, and others agreed to acquire Qualtrics, a Provo, Utah-based software developer, for $18.15 per share.
- BCM One, a Thompson Street Capital Partners portfolio company, acquired Pure IP, a London-based cloud-based voice services provider. Financial terms were not disclosed.
- H.I.G. Capital acquired CLC Group, a Southampton, U.K.-based property and asset refurbishment provider, from the Armitage Family Trust. Financial terms were not disclosed.
- The pest control services platform of Percheron Capital acquired Lookout Pest Control and Any Pest, a Rossville and Kennesaw, Ga.-based pest control provider. Financial terms were not disclosed.
- Right Time, backed by Gryphon Investors, acquired Shines Energy, a Dartmouth, Canada-based heating and cooling company. Financial terms were not disclosed.
OTHER
- soona acquired Trend.io, a marketplace of curators and brands. Financial terms were not disclosed.
- Vertical Insure, a Minneapolis-based embedded insurance platform for vertical SaaS platforms, and Next Wave, a San Diego-based commercial, accident, and travel insurance products provider to vertical industries, completed a merger. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Socium Ventures, a fund within Cox Enterprises, allocated $300 million to a fund focused on venture investments in growth businesses.
PEOPLE
- CMT Digital, a Chicago-based investing firm, hired Erik Ellingson as head of business development and Augustus Ilag as head of Asia. Formerly, Ellingson was with Lincoln International and Ilag was with Sequoia Capital.
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