The round values the institutional liquidity network at $400M
Paradigm (“the Company”), the zero fee, institutional liquidity network for derivative traders, announced the closing of a $35M Series A funding round. The round values the company at $400M and was co-led by Jump Capital and Alameda Ventures. The Company is bridging the infrastructure gap between crypto and traditional finance by serving as a liquidity access point to institutional buyers and sellers for large and/or complex derivatives trades across both CeFi and DeFi markets.
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Over 25 investors participated in the Series A, including Genesis Trading, QCP Capital, Nexo, Optiver US, IMC, GSR, Akuna Capital, Babel Finance, MGNR, Avon Ventures, CMT Digital, executives at Goldentree Asset Management and Amber Group. Investors from previous seed rounds Dragonfly Capital, Digital Currency Group, Vectr Fintech Partners and Mirana Ventures, Venture Partner of Bybit and BitDAO also participated.
For institutional investors, finding liquidity on-demand that is tailored to their price, size, immediacy, and risk preferences can be an extremely challenging task. Before Paradigm, institutional traders had to maintain their own private network of counterparty relationships to help source liquidity, particularly for large and multi-leg/complex trades. Moreover, no standardized workflow automation tools exist today to facilitate the negotiation and execution of complex, multi-leg and multi-product strategies via a single atomic transaction.
With Paradigm, traders connect directly with institutional counterparties in the Paradigm network to get better-than-market prices (often at mid pricing) and for much larger sizes. Paradigm also provides all the workflow automation tools necessary to facilitate multi-leg and multi-product strategies with underlying hedges via a single executable structure. This increases trading precision, eliminates leg risk and lowers execution costs since all legs and hedges are executed as one single block, as opposed to piecing the trade together manually on screen. In addition, the platform is also free to use!
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The Company works with over 600 institutions and trading volumes on the network have increased upwards of 1300% year-over-year to $10B in total volume traded per month. Paradigm has grown significantly in 2021, increasing its headcount 3x while capturing a 30% market share of options volume globally.
Paradigm’s product suite includes complex orderbooks focused on spreads and combinations, spread matrices for futures, and loans rate curves. Traders on Paradigm choose the settlement venue where they want their trade to settle, which allows Paradigm to remain non-custodial and charges no fees. “We estimate that large and multi-leg orders account for roughly 30% of global listed derivatives volumes, or roughly $50–75 B per day,” Anand Gomes, Paradigm’s Co-Founder and CEO stated, “At Paradigm, we are focused on establishing a robust network before monetizing. This funding round allows us to continue building out our network of institutional traders, CeFi exchanges, and DeFi protocols, while also enhancing our 24/7 customer support, and expanding upon our current product offerings to better accommodate the needs of our clients.”
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