Andreessen Horowitz intends to invest billions of dollars in crypto start-ups. Partners describe the long-term potential in crypto as “the next major computing era.” The latest funding marks the firm’s fourth crypto fundraise, bringing the total raised funds to $7.6 billion.
The Silicon Valley firm announces a new $4.5 billion fund
On Wednesday, the Silicon Valley firm announced a new $4.5 billion venture capital fund dedicated to cryptocurrencies and blockchain technology. The firm intends to invest in both the cryptocurrencies and the company’s shares for each project.
The first crypto-focused fund from Andreessen Horowitz was established four years ago, during the “crypto winter,” as the general partner at Andreessen Horowitz, Arianna Simpson, remarked that the “bear markets are when the greatest possibilities arise.”
Cryptocurrencies have plummeted and are now significantly below their all-time highs, with bitcoin having lost more than 50% of its value since its peak in November, and they remain highly correlated to higher-growth technology stocks, which tanked this year. The loss of value of the stablecoin TerraUSD in May rattled investor confidence and piqued the interest of regulators. Although the situation may be “a little bit uncertain,” according to Simson, investors should not be concerned about the company’s bets.
Andreessen Horowitz focuses on investments in blockchain technology
Andreessen Horowitz is one of the most active investors in Web3 with investments in OpenSea, Yuga Labs, Avalanche, Sky Mavis, Dapper Labs, and Anchorage Digital. It’s scouring the landscape for NFTs to DAOs to find opportunities.
Andreessen Horowitz is best known for his early investments in Instagram, Lyft, Pinterest, and Slack. Its first significant cryptocurrency investment with Coinbase helped them rocket to the top of this year’s Midas List of the world’s best venture capitalists, trading down more than 75% for the year to date. The firm, which has a market capitalization of around $14 billion, recently aired an advertising campaign mocking prior proclamations that cryptocurrency was on its way out.
Some tech luminaries have been critical of the flood of investment in so-called “Web3” start-ups attempting to create blockchain-based companies. Elon Musk and Jack Dorsey, two of the world’s most famous technology entrepreneurs, have questioned “Web3.” On Twitter, Dorsey claims that the venture capitalists and their investors will ultimately control Web3, calling it “a centralized entity with a different name,” implying that it would never escape their enticements.”
The people who are doubting us are not where we are, which is fortunate in the position of being able to interact with these creative builders all day long.Arianna Simpson, general partner at Andreessen Horowitz.
Andreessen Horowitz in March funded $23 million in a Series to Opensea, an online marketplace for buying, selling, and collecting NFTs. The newly acquired funds would be used to grow the NFT marketplace in preparation for the trillions of users expected throughout the coming years. In April, the company said it will roll out the second wave of cryptocurrency funding to raise $450 million and be used primarily in the crypto sector.
a16z and crypto success
The firm was founded in 1997 by Ben Horowitz and Marc Andreessen, two entrepreneurs who were looking for a better way to raise money. The fund raised $350 million in two years when it first opened 11 years ago. However, since it began operations, it had been pouring money into technology companies and controlling around $1.2 billion two years after inception. As a result of this, it placed tenth on the Forbes Midas List of top investors.