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Andreessen Horowitz said approximately $1.5 billion of the new funds will be invested in startups at the seed fund stage while the remaining $3 billion will serve as venture investments.
Venture Capital giant, Andreessen Horowitz (a16z) launched a new mega crypto fund worth $4.5 billion on Wednesday. Dubbed Crypto Fund IV, the massive funding round ranks as the very fourth funding round from the company since it started betting on the fast-growing crypto ecosystem.
“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,” said Chris Dixon, General Partner at a16z. “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. 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, totaling $4.5B.”
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.
Andreessen Horowitz said approximately $1.5 billion of the new funds will be invested in startups at the seed fund stage while the remaining $3 billion will serve as venture investments. To date, a16z now has up to $7.6 billion in investment in the Web3.0 ecosystem, ranking as one of the largest VCs backing crypto investments.
Banking on Andreessen Horowitz Choice amidst Bear Market
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 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.
Andreessen Horowitz has a major stake in a number of companies it bet on at their early stages. Some of these companies in the digital currency ecosystem include Coinbase Global Inc (NASDAQ: COIN), OpenSea, Solana, and Dapper Labs amongst others. While it can boast of these bets that turned out successful, it believes with the next frontier the ecosystem is charting, the $4.5 billion funds can also be used to bootstrap the next generation of blockchain and Web3 startups that can power the future of the internet.