Andreessen Horowitz bets big on crypto with new $4.5bn fund

25 May 2022

Chris Dixon at TechCrunch Disrupt in 2015. Image: Noam Galai/Getty Images for TechCrunch (CC by 2.0)

Chris Dixon of A16z said that the fresh crypto fund comes at a time when we are ‘entering the golden era of Web3’.

Silicon Valley VC giant Andreessen Horowitz is betting big on blockchain with a new $4.5bn fund for crypto start-ups.

The crypto fund includes $1.5bn for seed investments and $3bn for venture investments. It is the largest fund of its kind ever raised and brings the VC firm’s total crypto funds raised to date to more than $7.6bn.

Andreessen Horowitz, also known as A16z, has been investing in crypto since 2013. Now, it believes that blockchain technology will be the next major revolution in computing.

Chris Dixon, managing partner and founder of Andreessen’s crypto arm, said that “we are now entering the golden era of Web3” in which 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. They are brilliant and passionate and want to build a better internet,” he wrote in a blogpost announcing the new crypto fund. “That’s why we decided to go big.”

Dixon said A16z will use the fund to invest in promising Web3 start-ups at every stage, including those developing Web3 games, decentralised finance and social media platforms, and NFT communities, among others.

It comes at a particularly turbulent time for the crypto industry. Cryptocurrencies across the board have plummeted in value in recent weeks and European Central Bank chief Christine Lagarde warned earlier this week that crypto assets are “worth nothing”.

But Arianna Simpson, general partner at Andreessen Horowitz, thinks it is a wise decision to invest during a period of downturn.

“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 told CNBC.

Andreessen Horowitz has been making a push to dominate in the crypto sector and has backed dozens of start-ups in this space so far – including a recently launched blockchain venture from controversial WeWork founder Adam Neumann.

Last month, A16z also said it was launching a new crypto research lab that aims to boost Web3 start-ups by bringing together academia and industry.

“Research labs like DeepMind and OpenAI have elevated the field of AI to new heights,” general partner Ali Yahya tweeted at the time. “We are setting out to do the same for crypto and Web3.”

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Chris Dixon at TechCrunch Disrupt in 2015. Image: Noam Galai/Getty Images for TechCrunch via Flickr (CC by 2.0)

Vish Gain is a journalist with Silicon Republic