Morpho raises $175M token round led by a16z crypto, Paradigm and Ribbit at up to $2B valuation

Decentralized lending protocol Morpho has raised $175 million in a token investment round led by a16z crypto, Paradigm, and Ribbit Capital, according to Fortune. Other participants included Apollo Funds, Circle’s venture arm, and VanEck. The deal was structured as a purchase of Morpho’s cryptocurrency at its average monthly price, with the implied valuation reaching up to $2 billion depending on investors’ entry timing.

The raise signals growing TradFi appetite for DeFi credit infrastructure as large institutions look to put deposits and yield strategies on-chain. Morpho, started in Paris by cofounder and CEO Paul Frambot and three other French founders, initially built a lending layer on top of Aave before pivoting to infrastructure that lets others “build their own Aave,” giving developers a framework to spin up customized lending markets.

Investors frame the deal as part of a broader convergence between DeFi and Wall Street. “I think the folks who live in FiDi and Wall Street maybe have to have casual Fridays,” said Guy Wuollet, general partner at a16z crypto. “And I think people in DeFi are, let’s say, dressing up ever so slightly.” Frambot emphasized his focus on underlying rails over financial engineering, saying, “I’m a tech guy, by the way. I’m not a finance guy. I don’t know anything about finance. I’m building infrastructure. I’m building code.”

Morpho is emerging as a serious challenger to incumbent money market protocols. It currently reports about $6.6 billion in assets locked, versus nearly $12.5 billion for Aave per DefiLlama, and has benefited from shifting flows after Aave had significant indirect exposure to a $290 million exploit of other protocols in April. The new capital and blue-chip cap table position Morpho to keep compressing that gap as institutions test DeFi lending stacks in production.