VC goliath Andreessen Horowitz (a16z) announced its fourth, and largest, crypto fund today — they hope to capitalize on discounts in the marketplace as the “golden era of web3” ramps up.
a16z’s newest crypto fund is more than double the size of its last one, which it raised last June. At $4.5 billion, it will be not just a16z’s biggest crypto fund, but the biggest one that the world of web3/blockchain/crypto has ever seen. It will take the crown from the Paradigm One Fund, which announced it pooled a total of $2.5 billion in November 2021.
a16z says it will allocate $3 billion to venture investments, which refers to investments in established protocols, blockchains, DAOs, and businesses. The remaining $1.5 billion will be allotted to seed investments, which means new or emerging firms.
Their criteria for investing? Well, quite broad. It’s everything under the crypto sun:
“We are excited about developments in web3 games, DeFi, decentralized social media, self-sovereign identity, layer 1 and layer 2 infrastructure, bridges, DAOs & governance, NFT communities, privacy, creator monetization, regenerative finance, new applications of ZK proofs, decentralized content & story creation, and many other areas.”
In tandem with their beefy checks, a16z also claims it provides operational resources to protocols and businesses it invests in. That broadly includes engineering, security, talent, regulatory, and marketing resources.
The firm’s latest fundraise comes at a trying time for the broader crypto market, which took a trillion dollar haircut after the collapse of the Terra blockchain and its troubled stablecoin, TerraUSD. However, a16z’s new fund shows that Terra and TerraUSD didn’t kill crypto — it simply offered a new, more desirable, entry point for the wealthy’s billions of dollars.