American venture capital firm Andreessen Horowitz, also known as a16z, announced that it has ushered in a whopping $2.2bn worth of limited partner commitments for its third crypto fund.
The value of the new fund is more than four times higher than the firm’s previous fund, which closed in April 2020. This suggests that the venture capitalist believes that investor interest in blockchain technologies remains high despite cryptocurrency prices recently seeing their strongest declines since 2018.
“Despite this momentum, we are still at the very early stages of what is possible. The size of this fund speaks to the size of the opportunity before us: crypto is not only the future of finance but, as with the internet in the early days, is poised to transform all aspects of our lives,” the a16z team wrote in a blog post.
The venture capital firm is confident that innovation will continue to increase in this sector even as asset prices fluctuate.
“We’ve never been more excited about where crypto is headed and we’re going all-in on the talented, visionary founders who are determined to be part of crypto’s next chapter.”
Strong track record in crypto
A16z started investing in crypto assets in 2013 and one of its earliest bets in this sector has brought it impressive returns.
The Menlo Park-based VC firm led Coinbase’s $25m Series A in 2013 and continued to buy in subsequent rounds or from existing investors to become the crypto exchange’s biggest outside investor. A16z’s stake in Coinbase was worth almost $10bn on the first trading day, according to a CNBC report.
The firm’s previous two crypto funds, worth a total of $815m, have been invested in over 30 crypto projects, including Uniswap, Polychain Capital and Dfinity (Internet Computer), according to data on the firm's website.
Expanded team to handle higher project volume
The new fund will invest in crypto networks and the founders and teams building in this space. The firm is interested in all stages, from early seed-stage projects to fully developed later-stage networks.
“This fund allows us to find the next generation of visionary crypto founders and invest in the most exciting areas of crypto.”
To handle the higher volume of transactions and projects, a16z has also expanded its crypto team. It brought on board former Securities and Exchange Commission’s finance director Bill Hinman, a former advisor to President Joe Biden, Tomicah Tillemann, and former US Treasury undersecretary Brent McIntosh.
It also took Silicon Valley veteran Rachael Horwitz as an operating partner leading marketing and communications. Horwitz was Coinbase’s first vice president of communications after leading communications strategies at Twitter, Google and Facebook.