By Jay Derenthal
Andreessen Horowitz, one of Silicon Valley’s top venture capital firms, has launched a $300 million cryptocurrency and blockchain investment fund. The fund is called "a16z crypto."
Longtime Andreessen Horowitz general partner Chris Dixon detailed the establishment of the new crypto fund in a blog post on the fund website that served as the company’s official announcement for the project.
"We are long-term, patient investors,” Dixon wrote. “We’ve been investing in crypto assets for 5+ years. We’ve never sold any of those investments, and don’t plan to any time soon. We structured the a16z crypto fund to be able to hold investments for 10+ years. We have an ‘all weather’ fund. We plan to invest consistently over time, regardless of market conditions. If there is another ‘crypto winter,’ we’ll keep investing aggressively.”
Since its founding in 2009, Andreessen Horowitz has matured into perhaps the most successful Silicon Valley venture capital (VC) firm, having invested in more multibillion dollar startups than any other company. The Sand Hill Road heavyweight has been involved in hundreds of investment rounds, leading around 200 of those rounds and completing nearly 100 exits to date.
Prior to the launch of the new crypto fund, Andreessen Horowitz had raised $7.1 billion across seven funds, with early stage investments in Airbnb, Asana, Facebook, Foursquare, Groupon, Oculus, Pinterest, Slack, Stack Exchange, Twitter, Udacity and Zynga.
In 2013, Andreessen Horowitz moved into the crypto space with a contribution to Coinbase’s $25 million funding round. That was followed by 20 more crypto investments, including capital and advisory backing of 21.co/Earn.com, Basis, OpenBazaar, Mediachain, Polychain Capital, Ripple, TradeBlock, and TrustToken. In 2018, Andreessen Horowitz led a $12 million investment round in the blockchain-based project CryptoKitties.
Andreessen Horowitz is well-known among VC firms as being “stage agnostic,” willing to invest in companies from seed to late stage, as well as remaining “domain agnostic,” with investments in both enterprise technology and consumer companies.
The firm is known for going far beyond just supplying capital. Andreessen Horowitz participates actively in the governance of companies that receive its capital investments. The company typically brings in its network of experts, including executive and technical talent, as well as top media and influencers.
Concerning the new crypto fund specifically, Dixon noted in the blog post, “We provide operational support to entrepreneurs. Our crypto investments have access to the same 80+ person a16z operating teams as do our non-crypto investments. Our operating teams have deep expertise in executive and technical recruiting, regulatory affairs, communications and marketing, and general startup management.”
The primary criticism of cryptocurrency ventures is their lack of real-world utility, with most being characterized as speculative investments. But, according to Dixon in his blog post, Andreessen Horowitz is “focused on non-speculative use cases.”
Dixon will co-lead the fund with Katie Haun, Andreessen Horowitz’s newest hire and its first female general partner. Haun was the U.S. federal prosecutor on both the Mt. Gox heist case and the case of two federal agents who were eventually convicted of stealing bitcoin during the Silk Road investigation. In 2015, she established the U.S. government's first cryptocurrency task force and taught Stanford Law School's first cryptocurrency criminology course. In 2017, Haun joined the board of Coinbase, where she got to know the partners at Andreessen Horowitz.
It was no surprise to VC firms up and down Sand Hill Road that Andreessen Horowitz would form a crypto fund after it posted hiring for crypto-focused roles in April. The move by a major Silicon Valley investment firm into a dedicated crypto fund is expected to inspire some degree of added confidence in investing across the cryptocurrency and blockchain space.
Now that the investment amount and co-leads for Andreessen Horowitz's new fund have been announced, the entire VC world will watch closely where it goes from here, and especially where Dixon and Haun decide to make the first investments.