Andreessen Horowitz launches $4.5 billion crypto fund despite the market downturn

    26 May 2022

    Major venture capital firm Andreessen Horowitz (a16z) has unveiled the largest-ever $4.5 billion crypto fund despite the ongoing downturn in the global financial markets. Focused on crypto and Web3, the new Crypto Fund IV is double the size of its previous fund, launched in 2021.

    The new fund is double the size of the last one the VC firm launched last year. About one-third of the new fund will be used for seed deals exclusively to ward off competition from native crypto VC firms, Paradigm and Electric Capital, Techcrunch reported. Focused on crypto and Web3, the fund brings a16z’s total holdings to $7.6 billion.

    The launch makes good on a plan unveiled in January, when the company published a now-updated investment thesis predicated on the “power of software” as “the encoding of human thought, and as such has an almost unbounded design space.”

    “We think we are now entering the golden era of Web3,” general partner Chris Dixon said, announcing the new fund in a blog post. “Programmable blockchains are sufficiently advanced, and a diverse range of apps have reached tens of millions of users. More importantly, a massive wave of world-class talent has entered [Web3] over the last year.”

    As Dixon told the audience at the Permissionless conference in Palm Beach, talent flocks to the industry during a bull market, while a bear market is a prime time for builders to focus on what comes next.

    The fund will invest in Web3 startups that run the gamut from DeFi, to gaming, infrastructure, DAOs, NFTs, privacy, decentralized social media “and many other areas.”

    The firm also plans to expand its in-house staff to meet the vetting needs of additional startup investments.

    It’s been less than one year since a16z announced its $2.2 billion Crypto Fund III, and the firm has endured just as many changes as the broader crypto market during that time. Recent months have seen the further ascent of crypto-native firms like Paradigm and Electric Capital, which have raised mega-funds to challenge a16z’s dominance.

    “We can’t predict the future state of the market, but we work with our companies to make sure they’re well-capitalized to handle the storms,” Arianna Simpson, general partner at Andreessen Horowitz, told Techcrunch. She added that “it’s likely other firms will pull back,” but that “the size of our new fund speaks to the level of excitement and belief we have in this category.”


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