Key facts
- Morpho Labs raised $175 million in a funding round.
- The funding round was led by Paradigm, a16z crypto, and Ribbit Capital.
- Morpho aims to provide credit infrastructure for banks, asset managers, and fintechs.
- Coinbase has utilized Morpho's smart contracts for over $2.17 billion in corporate USDC loans.
- Venture capital funding is increasingly focused on later-stage crypto infrastructure projects.
Morpho Labs has successfully raised $175 million in a funding round, signaling a significant shift in venture capital focus within the cryptocurrency space towards established onchain credit infrastructure. The round was led by prominent investors including Paradigm, a16z crypto, and Ribbit Capital.
While Morpho is recognized as a decentralized finance (DeFi) lending protocol, its strategic aim is to evolve into a foundational credit infrastructure layer for traditional financial entities such as banks, asset managers, and fintech companies. This move aligns with a broader investor trend of backing infrastructure that supports the expansion of stablecoins and other tokenized financial products, rather than solely focusing on DeFi lending protocols.
Onchain credit markets enable users and institutions to engage in borrowing, lending, and capital deployment using blockchain-based assets. Investors are betting on the sector's growth as stablecoin adoption increases. Sam MacPherson, CEO of Spark, noted that as stablecoins scale, credit infrastructure becomes a critical component of the overall ecosystem.
Data from DeFiLlama shows Morpho has a total value locked (TVL) of $6.72 billion and approximately $3.47 billion in active loans, indicating substantial liquidity depth. The protocol's role as infrastructure is further highlighted by Coinbase's use of Morpho's smart contracts to facilitate over $2.17 billion in corporate USDC loans. This suggests a growing adoption by non-crypto-native entities looking to leverage blockchain for business-to-business credit products.
Morpho plans to utilize the new capital over the next 12 to 18 months to expand integrations with financial institutions, attract more institutional capital, and introduce features from traditional credit markets. Co-founder Merlin Egalite described the funding as "the largest raise in DeFi history" and emphasized the goal of becoming the underlying infrastructure for various financial players.
The substantial funding for Morpho comes at a time when venture capital is increasingly concentrating on a select group of established crypto infrastructure projects. A Q1 2026 report by CryptoRank indicated a significant year-over-year surge in capital allocated to Series C and later-stage funding rounds, which now represent a larger portion of total venture funding compared to seed and pre-seed stages.