Paradigm and a16z back Morpho with $175M funding

Blockchain lending protocol Morpho has secured US$175 million in fresh funding as major venture capital firms increase their bets on the future of onchain credit markets and tokenised financial infrastructure.

The funding round was co-led by Paradigm, a16z crypto and Ribbit Capital, with participation from Apollo Funds, Circle Ventures, VanEck and Ledger Cathay.

Morpho said the new capital will be used to expand its institutional lending infrastructure and develop programmable credit products designed for both crypto-native and traditional financial institutions.

The protocol currently holds more than US$11 billion in deposits and provides lending infrastructure for organisations including Bitwise, Galaxy, Anchorage Digital, Coinbase, Kraken and Binance.

Unlike many crypto projects that seek to replace traditional financial institutions, Morpho is positioning itself as a technology provider that enables banks, asset managers and fintech firms to build lending products on blockchain rails.

The investment reflects growing institutional interest in tokenised assets, blockchain-based settlement systems and digital credit markets as financial firms explore ways to modernise lending and capital market infrastructure.

Investors backing the round are effectively wagering that credit markets, one of the largest segments of global finance, will increasingly migrate onchain over the coming decade, creating demand for scalable lending protocols capable of supporting institutional-grade financial products.

At the time of reporting, Morpho price was $1.93.