Silicon Valley investment powerhouse Andreessen Horowitz (a16z) is doubling down on crypto, even as digital assets have struggled to find footing since the firm raised $300 million for its first-ever fund dedicated to crypto companies.
Top venture capital firm has collected $515 million for its second crypto, which will back new cryptocurrency-related ideas, but it was not clear if this includes investing directly in the currencies themselves. It had originally aimed to raise $450 million but has not placed a hard cap on its size.
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Over two to three years, it plans to put that money in everything from payment blockchains to later-stage networks like bitcoin and decentralized finance (DeFi). The Silicon Valley-based investor expects the crypto-based applications, including theWeb 3, could end up doing to banks what email did to the post office and what VoIP services did to long-distance carriers.
“These are a few areas where people are already building, but it only scratches the surface of the yet-to-be-imagined applications that entrepreneurs will dream up. In the same way that it wasn’t obvious in 2007 how applications on top of mobile phones would change so many aspects of the ways in which we move, consume, travel, communicate, and even date, it’s hard to imagine what the very best apps and use cases will be for blockchain-based computing platforms,” the company said.
The new fund signals some investors are still willing to back blockchain projects despite the recent volatility in cryptocurrency prices and uncertainty surrounding the Covid-19 outbreak.
The Silicon Valley-based firm moves to vastly expand the scope of its activities nearly two years after it launched its first $300 million crypto fund. Called “a16z crypto,” the fund specializes in crypto-assets and projects that build on blockchains.
Even before this, Andreessen has been one of the most active investors in cryptocurrency thanks to investments in a number of notable startups. The investor poured money into the industry unicorn Coinbase, Visa-led digital asset custodian Anchorage, hedge fund Polychain Capital, and blockchain-based social payment app Celo.