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Andreessen Horowitz closed its second fund with $515 million in capital commitments. The company’s second crypto fund shows that the venture capital firm is targeting specific areas to invest in the cryptocurrency space.
Two years after they’ve managed to raise $300 million for its first investment fund devoted to Bitcoin and other cryptocurrency projects, this Silicon Valley company manage to raise a second fund with a pretty much similar story. The new vehicle, which closed Thursday and focuses on blockchain technology, the database innovation behind cryptocurrencies, totals $515 million. And this amount is higher than the initial goal of $450 million.
Chris Dixon, co-leader of the fund said:
“It’s very rare that major, new computing paradigms come along, and we think this is on the scale of cloud and mobile for the Internet.”
Dixon added that he estimates to see the launching of numerous new blockchain startups including those from the previous fund’s bets, such as the very much-praised “world computer” Dfinity, in 2021.
Contrast to First Crypto Fund of Andreessen Horowitz
However, this represents also a contrast to a16z’s first crypto fund. In its initial investment thesis, the VC mentioned numerous interesting use cases, including stablecoins, financial inclusion and the tokenization of real-world assets.
“We are still early in the crypto movement. The infrastructure needs to be improved and the applications are difficult for non-early adopters to use. Many crypto applications still get dismissed as toys.”
Andreessen Horowitz was one of the earliest venture companies who actually believed in Bitcoin and blockchain technology. In January 2014, its co-founder, Marc Andreessen, who also cofounded onetime Internet browser king Netscape and now sits on Facebook’s board, used to praise digital money’s positive sides.
Let’s also not forget that the company has already invested heavily within the crypto space. Last year the firm raised its first crypto fund, with $300 million in capital committed.
Since then, Andreessen Horowitz has always invested in cryptocurrencies like Bitcoin and Ethereum, as well as other crypto-inspired projects, such as Maker DAO, a stablecoin developer; Compound, a crypto lender that enables users to earn interest on their deposits; and Celo, a mobile payments startup.
Collaboration with Coinbase and Protocol Labs
It also collaborated with Coinbase, Protocol Labs, famous for making Filecoin, a decentralized file storage alternative to Dropbox, and crypto custodian Anchorage.
Last year, Andreessen decided to go even bigger and became a registered investment adviser, a feature approved by the Securities and Exchange Commission that gives it more resilience in order to invest in things like are crypto tokens.
Katie Haun, a former federal prosecutor who co-leads the crypto fund and serves as a chair on the board of the Facebook-corralled Libra Association, didn’t want to reveal the first fund’s performance to date but has confirmed that the firm plans to hold on to its best for the long term, as long as 10 years.
Haun also speaks very nicely when it comes to the Libra Association. One of the first fund’s investments, Libra has been gathering new members during recent months, including Shopify and Checkout.com. However, the association did lose some of the big names as are Visa, PayPal, and Mastercard last year.