Andreessen Horowitz (a16z), the Silicon Valley-based venture capital firm, today announced it raised a whopping $4.5 billion for a new crypto fund, the firm's fourth and the biggest so far.
Crypto Fund 4 doubles the size of a16z’s previous crypto fund raised in June last year, showcasing that despite the turmoil in the crypto market, the firm’s partners are increasingly looking to get more exposure to promising Web3 startups.
“We think we are now entering the golden era of web3. Programmable blockchains are sufficiently advanced, and a diverse range of apps have reached tens of millions of users,” a16z partner Chris Dixon wrote in a post accompanying the raise.
“More importantly, a massive wave of world-class talent has entered web3 over the last year. They are brilliant and passionate and want to build a better internet,” he added.
Of the $4.5 billion raised, $1.5 billion will be going towards seed investments, with the rest set aside for venture investments, said a16z.
According to Dixon, the firm is specifically “excited” about the latest advancement in sectors including Web3 games, decentralized finance (DeFi), decentralized social media, self-sovereign identity, layer-1, and layer-2 infrastructure, DAOs and governance, NFT communities, privacy, creator monetization, regenerative finance (ReFi), new applications of ZK proofs, decentralized content and story creation, and many other areas.
Focus on the ‘top echelon of founders’
The news of a16z's latest crypto fund comes at a time when the broader crypto market has entered a major downturn following the collapse of the TerraUSD stablecoin and its sister coin LUNA.
Despite the slump, Andreessen Horowitz partner Ariana Simpson assured investors that the firm is confident about its bets.
“Bear markets are often when the best opportunities come about, when people are actually able to focus on building technology rather than getting distracted by short-term price activity,” Simpson said in an interview with CNBC.
She went on to say that “the technical diligence and the other kinds of diligence that we do are a key part of making sure that projects meet our bar.”
“While our pace of investment has been high, we continue to invest really in only the top echelon of founders,” said Simpson.
The firm’s current crypto portfolio includes the likes of Alchemy, Avalanche, Celo, Dapper Labs, Phantom Wallet, OpenSea, Solana, and Yuga Labs.
Earlier this week, the firm invested in Flowcarbon, a blockchain-based carbon-credit trading platform which also backed by controversial WeWork founder Adam Neumann.
In a separate move earlier this month, Andreessen Horowitz announced the launch of GAMES FUND ONE, which will invest $600 million across the gaming industry.