ParaFi Technologies aims to be a ‘public utility provider’ to blockchain ecosystems
ParaFi’s Kevin Yedid-Botton explains why ParaFi’s looking to be more than just a VC firm
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If there’s one thing ParaFi wants you to know, it’s that it’s not like other venture capital firms. ParaFi Technologies, the tech infrastructure arm, helps make it stand out against the rest of the pack.
Outside of the well-known venture capital arm, ParaFi Technologies has validator systems running with over $1 billion in assets staked, operating as an Ethereum validator in addition to Aptos and Solana.
“In a simple sense, we’re an investment and technology firm,” ParaFi partner Kevin Yedid-Botton told me. “We really view ourselves as a public utility provider to the blockchain ecosystem.”
“From a purely business perspective, our revenue is diversified. We’re not dependent on a single stream of revenue from a single fund. We have our quant fund, we have our venture fund, we have our token fund, and we have these other auxiliary businesses, the GP business and the technology business,” he further explained.
One big benefit — outside of revenue — that Yedid-Botton found in ParaFi’s approach to their multi-business structure is that there’s open communication between the teams, who all have different skill sets. From engineers to legal, ranging from really crypto native to not-so-crypto native, Yedid-Botton thinks the firm created a “unique combination” to “find alpha in ways other firms can’t.”
While a bull market has its own set of difficulties, bear markets are, well, a beast to survive.
Yedid-Botton said that the firm saw assets under management “compression from prices going down but our quant fund was actually flat to up that year.”
Which he noted was an example of “how, despite certain strategies underperforming, because we have a platform of strategies, we’re able to mute the volatility and the cycles that the market gives you because we’re diversified.
“Today, that’s even more true, because even in 2022 to be intellectually honest, we were in the early stage of setting up what the ParaFi of today looks like. We didn’t have as big of a business” as they do now.
Despite the bearish vibes we saw just last week, though, it’s pretty clear that the bullish cycle isn’t exhausted just yet.
For ParaFi, this next cycle is going to be focused on growing the existing businesses. With over $1 billion in assets under management, Yedid-Botton says ParaFi plans to do over 5x that in the next few years.
“I don’t see you know why we couldn’t be at a five to $10 billion-plus easily. And we have a very unique LP based too, that is mostly institutional, mostly family office … from a technology standpoint, as a firm, I think we’re going to cement [our] flag and say ParaFi is not just a VC firm.”
See, mom, they’re not just an investment and technology firm, they’re a cool investment and technology firm.
Updated Dec. 31, 2024 at 3:17 pm ET: Emphasized distinction between ParaFi and its technology arm.
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