ParaFi Capital, a digital asset manager based in New York, has successfully raised $120 million from investors, including Theta Capital Management and Accolade Partners, according to a report by Olga Kharif for Bloomberg.
The firm, which counts KKR & Co. co-founder Henry Kravis among its backers, plans to use part of the funding to acquire general-partner stakes in other crypto funds. These funds focus on specific market segments, strategies, or geographies, marking a new strategic direction for ParaFi.
Bloomberg reports that ParaFi aims to build a diverse portfolio of 30 to 50 such stakes within the next three to five years. Ben Forman, the founder of ParaFi, mentioned in an interview with Bloomberg that the firm has already supported nine different crypto managers using its own balance sheet over recent years. With this new influx of capital, ParaFi is expanding its strategy to include outside investors just as the number of crypto funds begins to grow again.
Forman noted to Bloomberg that while general-partner stakes are a growing asset class in traditional finance, they haven’t yet been established at scale in the crypto space. He expressed confidence that this will change as the landscape of crypto funds evolves. Forman emphasized the importance of specialization and focus in this sector, whether it pertains to geography, theme, or type of investment.
The Bloomberg report also mentioned that crypto funds have been actively raising capital this year as digital asset prices recover from the downturn caused by a series of bankruptcies and scandals in 2022. ParaFi, which has been operating for about six years, is among the most prominent and sizable crypto funds, managing both hedge fund and venture capital strategies. The firm has a 22-person team and counts notable investors, such as Bain Capital Ventures, alongside KKR and Kravis. Forman, who founded ParaFi, has a professional background with KKR.
On August 28, Lemniscap, a venture capital firm, announced the successful raising of a $70 million fund aimed at supporting early-stage Web3 startups. The fund will be directed towards a variety of blockchain-based businesses, including those involved in zero-knowledge infrastructure, consumer applications, emerging Bitcoin ecosystems, security advancements, and decentralized physical infrastructure (DePIN).
Lemniscap has been active in the crypto sector since launching its first fund in 2017, just before the market downturn in 2018. Over the years, the firm has invested in more than 130 projects within the Web3 space, including notable protocols such as Avalanche, Fairblock, Celestia, EigenLayer, Euler, ParaSwap, and Axelar.
The new fund has garnered backing from Accolade Partners, a fund of funds recognized for its investments in early-stage blockchain ventures. Lemniscap’s investment strategy traditionally emphasizes long-term success, focusing on blockchain innovation. The firm provides both financial support and strategic guidance to the startups within its portfolio.
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