Andreessen Horowitz, the Silicon Valley enterprise capital agency famed for making profitable bets on early-stage tech firms that finally grew to rule the world, is staking its subsequent declare within the land of cryptocurrency.
Earlier at this time, it revealed a $2.2 billion fund for investments in crypto networks. “We imagine that the subsequent wave of computing innovation shall be pushed by crypto,” reads a blog post from a trio of companions at Andreessen Horowitz—one in all them being Chris Dixon, a number one voice within the angel investing sphere. “We’re radically optimistic about crypto’s potential to revive belief and allow new sorts of governance the place communities collectively make necessary choices about how networks evolve, what behaviors are permitted, and the way financial advantages are distributed.” In keeping with them, crypto, “as with the web within the early days, is poised to rework all elements of our lives.”
The unconventional optimism isn’t new: The fund marks a16z’s third foray into the crypto panorama. It raised a primary fund of $300 million in 2018, throughout the thick of what’s now known as “crypto winter”—a interval when cryptocurrency values plunged roughly 80% after heating as much as document highs the yr earlier than. On the time, Dixon known as the battle chest an “all-weather” fund, pledging to speculate aggressively all through digital forex’s risky highs and lows.
However this time, Andreessen Horowitz’s fund will launch within the midst of a cryptocurrency gold rush. In keeping with Bloomberg, enterprise capital corporations have pumped $17 billion into the industry this yr. Investments are additionally trending towards the mainstream, as conventional money-management firms like PayPal and Visa dip their toes by taking stakes in crypto VC agency Blockchain Capital’s latest fifth fund.
However with its newest, largest crypto fund but, Andreessen Horowitz is diving deep. It has mentioned it plans to spend money on digital asset startups with a deal with “decentralized finance,” a time period that encompasses methods constructed on blockchain know-how. Its present holdings embody OpenSea, a blockchain-based market for digital objects, and Dapper Labs, makers of the NBA’s Prime Shot retailer for so-called crypto collectibles.
It’s additionally assembled a workforce of advisors together with a number of with coverage expertise, hoping to navigate potential cryptocurrency rules that could possibly be on the horizon as requires federal involvement intensify.
The agency’s resume consists of early bets on Fb, Instagram, Lyft, Skype, and Stripe—in addition to Coinbase, a cryptocurrency buying and selling platform that netted the agency $11.2 billion when it debuted on the Nasdaq earlier this yr. Nevertheless, Coinbase’s inventory has since dropped practically 50% because the crypto market’s hype has died down in latest weeks, with token values buffeted by bitcoin mining restrictions in China and Elon Musk’s erratic tweets.