ParaFi Capital Raises $125 Million New Fund to Target Institutional Crypto Infrastructure

ParaFi Capital, a New York-based digital asset manager backed by KKR co-founder Henry Kravis and Bain Capital Ventures, raised $125 million in March 2026 for a new venture fund focused on stablecoins, asset tokenization, and institutional on-chain finance, bringing the firm’s total assets under management to approximately $2 billion.

Since the beginning of 2025, ParaFi has raised an additional $325 million for its existing digital asset investment strategies, according to the firm. Founder Ben Forman stated that the successful raise in a “difficult market backdrop” signals that “sophisticated investors are increasingly distinguishing between short-term token price volatility and the long-term adoption of blockchain-based financial infrastructure.”

The new fund will target companies building next-generation payment rails, platforms for tokenizing real-world assets, and institutional-grade decentralized finance (DeFi) protocols—areas that ParaFi believes are critical for bridging traditional finance with blockchain networks.

Fund Strategy and Investment Focus

Three Core Verticals

ParaFi’s new venture fund will concentrate investments across three specific categories:

Stablecoins: Next-generation payment and settlement rails that enable faster, lower-cost transactions

Asset Tokens: Platforms for tokenizing traditional assets including equities, bonds, and real estate

On-Chain Finance: Institutional-grade DeFi protocols and infrastructure that meet compliance and security standards for traditional financial institutions

The fund’s mandate reflects a broader industry trend where traditional financial entities seek compliant, scalable pathways into blockchain-based systems. ParaFi’s strategy involves identifying and funding projects that build critical bridges, including regulated stablecoin issuers, institutional custodial solutions, and permissioned DeFi platforms.

Portfolio Composition

ParaFi already holds positions in prominent crypto projects including prediction market platform Polymarket, asset manager Bitwise, and crypto custodian Anchorage. The firm was founded in 2018 by Ben Forman, a former investor at TPG and KKR.

Capital Raising Context

Fundraising Timeline

ParaFi’s recent capital raises include:

Early 2024: $120 million raised from investors including Theta Capital Management and Accolade Partners

Since early 2025: $325 million raised for existing digital asset investment strategies

March 2026: $125 million new venture fund

Total assets under management now approximate $2 billion.

Market Backdrop

The fundraising comes at a time when many crypto venture funds have been under stress amid declining digital asset prices. Bitcoin has fallen more than 40% since its October 2025 all-time high, and many funds have shifted focus toward deep tech investments, including robotics startups. Forman characterized the successful raise as evidence that sophisticated investors distinguish between short-term price volatility and long-term adoption trends.

Investor Base

Institutional Backers

ParaFi’s investors include:

Henry Kravis: Co-founder of KKR & Co.

Bain Capital Ventures: Long-standing venture capital firm

Theta Capital Management: Specialized crypto fund investor

Accolade Partners: Global investment firm

Founding Background

Ben Forman, founder of ParaFi, previously worked at KKR and TPG before launching the firm in 2018. His traditional finance background has informed ParaFi’s focus on bridging institutional capital with blockchain infrastructure.

Industry Context and Analyst Perspective

Maturation of Crypto Venture Capital

After a contraction in 2023, crypto venture funding showed resilient recovery throughout 2024. PitchBook data indicates venture funding for blockchain startups increased 30% year-over-year in the fourth quarter of 2024. However, the nature of investments has shifted away from speculative consumer applications toward foundational, revenue-generating B2B infrastructure.

Galaxy Digital Research noted in a recent report: “ParaFi’s targeted fund addresses a clear gap in the market. There is abundant capital for early-stage protocols but a shortage for Series B and C rounds building enterprise-ready solutions.”

Regulatory and Market Drivers

Several factors are driving institutional interest in blockchain infrastructure:

Regulatory clarity: Improved frameworks in jurisdictions including the EU and UK

Proven revenue models: Emergence of sustainable business models in areas such as blockchain data analytics and institutional staking

Tangible use cases: Tokenization projects moving from pilot to production in traditional finance

Frequently Asked Questions

What is ParaFi Capital’s new $125 million fund targeting?

The fund will invest in three key areas: stablecoin technology and issuers, platforms for tokenizing real-world assets, and institutional-grade on-chain finance (DeFi) infrastructure and protocols.

How much does ParaFi Capital manage in total assets?

With the new fund and recent capital raises, ParaFi Capital now manages a total portfolio of approximately $2 billion in assets.

Who are ParaFi Capital’s key investors?

ParaFi’s investors include KKR co-founder Henry Kravis, Bain Capital Ventures, Theta Capital Management, and Accolade Partners. The firm was founded by Ben Forman, a former investor at KKR and TPG.

Why is the fund focused on institutional crypto infrastructure?

The fund recognizes growing demand from banks, asset managers, and corporations for compliant, secure, and scalable ways to interact with blockchain-based financial systems. This institutional adoption represents what many observers view as the next major wave of crypto adoption.