VC Firm a16z Raises $4.5 Billion for a Crypto Firm

At a time when the broader crypto market has entered a downturn following the collapse of TerrraUSD and LUNA, Andreessen Horowitz (a16z), a Silicon Valley-based venture capital firm, has announced the raise of a whopping $4.5 billion for a new crypto fund.

The firm’s fourth and biggest so far, "Crypto Fund 4" doubles the size of a16z’s previous crypto fund raised in June last year, showcasing that despite the ongoing turmoil, partners at Andreessen Horowitz are 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

Dixon said a massive wave of world-class talent has entered web3 over the last year, who are brilliant, passionate, and want to build a better internet.

Here are 5 things you should know about the fund:

- Of the $4.5bn raised, $1.5bn will go towards seed investments, with the rest set aside for venture investments

- 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.

- 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.

a16z confident about bets

Meanwhile, Andreessen Horowitz partner Ariana Simpson in an interview with CNBC had 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, adding 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.”