Andreessen Horowitz Launches Fresh $4.5 Billion Crypto Fund Despite Market Dip

The Silicon Valley-based venture capitalist company already has three funds geared towards the industry.

By Shomik Sen Bhattacharjee | Updated: 26 May 2022 14:59 IST

Andreessen Horowitz Launches Fresh $4.5 Billion Crypto Fund Despite Market Dip

Photo Credit: Twitter/ Andreessen Horowitz

Andreessen Horowitz has been investing in crypto since 2013

Highlights

Cryptocurrencies have slid significantly from their all-time highs
A16z will dedicate $1.5 billion of the fund towards seed investments
$3 billion of the fund will be directed toward venture investments

Web 3 venture capital giant, Andreessen Horowitz aka a16z, has launched a new mega crypto fund worth $4.5 billion (roughly Rs. 34,912 crore) — the firm's fourth to target digital assets, with over $7.6 billion (roughly Rs. 58,964 crore) being raised in total. Dubbed 'Crypto Fund IV', the company stated that it will allocate $1.5 billion (roughly Rs. 11,638 crore) to seed investments and $3 billion (roughly Rs. 23,277 crore) to venture investments. Interestingly, a16z's previous funds were raised in June 2021 and in April of 2020, both of which came shortly after crypto market downturns.

"We think we are now entering the golden era of Web 3. Programmable blockchains are sufficiently advanced, and a diverse range of apps have reached tens of millions of users," said Chris Dixon, General Partner at Andreessen Horowitz. "More importantly, a massive wave of world-class talent has entered Web 3 over the last year. They are brilliant and passionate and want to build a better internet. That's why we decided to go big. We've been investing in crypto since 2013, and today we're announcing our fourth crypto fund, totalling $4.5 billion (roughly Rs. 34,912 crore)."

As @cdixon wrote, we think the golden era of web3 is just beginning. Programmable blockchains are advanced, a diverse range of apps have tens of millions of users, and waves of world-class talent are pouring into web3 every day.
— AriannaSimpson.eth (@AriannaSimpson) May 25, 2022

We will also keep expanding the a16z crypto operating teams that provide world-class support to our founders, spanning research and engineering, security, talent & people, legal & regulatory, go-to-market, and a lot more.
— AriannaSimpson.eth (@AriannaSimpson) May 25, 2022

The funding comes at a time when the broader crypto industry is experiencing a massive downturn and criticism from various angles. With the steep correlation with the tech industry which has been experiencing a massive onslaught in recent times, the funding comes off as a bet on the future of the ecosystem at a time when many investors are re-evaluating their stance in the industry.

That a16z is betting on the crypto ecosystem might worry a lot of observers, especially those with an interest in the industry. In an effort to allay these fears, Arianna Simpson, a general partner at Andreessen Horowitz said speaking to CNBC that the company makes its bets by focusing on startups building lasting technologies and infrastructure in the space.

"The technical diligence and the other kinds of diligence that we do are a key part of making sure that projects meet our bar," she said. "While our pace of investment has been high, we continue to invest really in only the top echelon of founders."

She noted that bear markets become largely insignificant when investors focus on value creation amongst crypto-focused protocols.

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