Andreessen Horowitz announces a $4.5B crypto fund, its fourth and largest so far, allocating about $1.5B for seed investments and $3B for venture investments

Since the advent of computing in the 1940s, there has been a major computing …

Financial Times 2022-05-26 Hannah Murphy

Context & Ripple Effects

Andreessen Horowitz’s dedicated crypto investing pools have expanded from a $515M second fund in 2020 to a $2.2B third fund in 2021. The new vehicle exceeds the fundraising target reported earlier this year, which contemplated separate later-stage and seed pools.

The allocation formalizes a larger pool for both company formation and venture rounds, giving Andreessen Horowitz capital to support crypto startups at more than one stage.

First-order effects

Crypto founders seeking seed backing gain access to a designated $1.5B pool, while later-stage companies can pursue the fund’s $3B venture allocation.
Andreessen Horowitz increases the capital it can deploy in crypto relative to its prior dedicated funds.

Second-order effects

Other crypto-focused investors face a larger Andreessen Horowitz presence in both seed and venture deal processes, where it can compete for investments across a startup’s lifecycle.
Startups already backed at seed can have a clearer route to seek follow-on venture funding from the same manager, concentrating fundraising relationships around larger specialist funds.

Third-order effects

The progression from $515M to $2.2B and then $4.5B points to crypto venture capital concentrating in fewer managers able to maintain dedicated vehicles across market cycles.
If this funding model persists, access to large multi-stage funds will become a more important differentiator between crypto startups than access to a single early-stage check.

The trend: Crypto venture investing is moving toward larger, multi-stage specialist funds that can finance startups from formation through later venture rounds.

Discussion

@ariannasimpson @ariannasimpson on x
Today we are announcing a16z crypto Fund 4. We've raised $4.5B to invest in promising web3 founders and startups, bringing our total crypto funds raised to more than $7.6B. 💪 https://a16zcrypto.com/...
@rahulsood @rahulsood on x
🐻 📈 stay focused keep building. 🐔 https://twitter.com/...
@carrawu @carrawu on x
Every day, I'm moved by the founders we work with— by their grit, resilience, & unwavering belief in what's possible. It's an honor to continue supporting web3 in its most spring-loaded era yet. Building smthg? DM's are open or email me: cwu@a16z.com Can't wait to meet you :) htt…
@taigxrp @taigxrp on x
Brought to you by #ethereum gas fees 😆 https://twitter.com/...
@fintechfrank Frank Chaparro on x
For the love of God they better be buying coins on the public market https://t.co/GjHP2Rl4EK
@0xfoobar @0xfoobar on x
Eventually ETH will be $100, preproduct seed rounds will be $500 million a pop, and venture funds will still refuse to buy publicly traded coins on secondary https://twitter.com/...
@janehk Jane Lippencott on x
Seems like as good a time as any to re-emphasize... We're hiring for a few roles on the @a16z crypto investment team! Email crypto-jobs@a16z.com with your resume + why web3 + why you'd like to work with us💡 https://twitter.com/...
@austin_federa @austin_federa on x
$1.5B allocated to seed rounds 😳 https://twitter.com/...
@andrewchen Andrew Chen on x
Congrats to my colleagues on the a16z crypto team - @cdixon @AriannaSimpson @sriramk @alive_eth @carrawu @janehk @eddylazzarin @milesjennings @guywuolletjr @VirtualElena and friends - on the launch of Crypto fund 4! Excited for the future of web3 and to collab 😎 https://twitter.c…
@phoenix_ash3s @phoenix_ash3s on x
In the good old days, news like this would've made the market Pump af. Ya know, those good old bullish times Now? Zero fucks given https://www.cnbc.com/...
@telcoinpaul Paul Neuner on x
Great to see this today. It's when everyone's stomachs are queasy that smart money moves in. Andreessen Horowitz bets on crypto ‘golden era’ with new $4.5bn fund https://www.ft.com/...
@smc90 Sonal Chokshi on x
Most computing cycles have “golden eras” when the right mix — including new talent, viable infrastructure, and community knowledge — comes together. We believe we're entering the golden era of web3, when great products get built. https://a16zcrypto.com/... https://twitter.com/...
@cryptoethan Ethan on x
Wait what?? How on earth were they able to raise so much in this market, and how are they gonna allocate it all?? A16z alone is gonna prevent private valuations from correcting https://twitter.com/...
@scottmelker @scottmelker on x
The crypto market may feel dead, but institutional money is still pouring in through VC. https://www.theblockcrypto.com/ ...
@ahcastor Amy Castor on x
A16z isn't ready to let this “Web3” thing die. They have investments to cash out on. Millions of dollars go into marketing dumb ideas, like Flowcarbon, so they can dump their shitcoins on Coinbase and sell to public https://www.cnbc.com/...
@sytaylor Simon Taylor on x
Web3 is entering winter @cdixon be like “hold my beer” 🔥🔥🔥🔥 🔥 https://twitter.com/...
@faresben_eth @faresben_eth on x
This is massive! Keep building.. Web3 is going nowhere, regardless the market sentiment. https://twitter.com/...
@nischalshetty @nischalshetty on x
A new $4.5 billion crypto fund by ⁦⁦@a16z⁩ Will be interesting to see how much of these funds India can attract However, Government will need to bring more regulatory clarity before large funds get the confidence to deploy into Web3 in India https://www.cnbc.com/...
@jimpethokoukis James Pethokoukis on x
Andreessen's Chris Dixon said the group believes the space is reaching a new “golden era” in which “new talent, viable infrastructure, and community knowledge” spurs rapid innovation."We believe blockchains will power the next major computing cycle." https://www.ft.com/...
@iankar_ Ian Kar on x
Wow...if they're charging 2% management fees that's 90m in fees too, lotta money to hire research and eng https://twitter.com/...
@kr00ney @kr00ney on x
Andreessen Horowitz @a16z raises $4.5B to back crypto start-ups while digital asset markets are in a rut “Bear markets are often when the best opportunities come about..” more on the firm's fourth crypto fund + chat with @AriannaSimpson https://www.cnbc.com/...
@packym Packy McCormick on x
a16z crypto made a name for itself investing with conviction through the last bear. this is going to be a good one. https://twitter.com/...
@mdudas Mike Daodas on x
if it's a down market, and you're trying to fund seed deals at reasonable valuations below $30m... ...then you need to write 500-1,000 $1.5-3m checks in a $1.5 billion seed fund
@benedictevans Benedict Evans on x
$4.5bn for crypto. No messing about... https://twitter.com/...
@silvermanjacob Jacob Silverman on x
Gm. It's time to build a bigger casino. https://www.cnbc.com/...
@sarthakgh @sarthakgh on x
4.5 billion holy shit the web2 vs web3 drama is going to get more unhinged https://a16zcrypto.com/...
@yoda @yoda on x
Biggest swing in fund history? https://twitter.com/...
@silvermanjacob Jacob Silverman on x
$4.5 billion to spend on tokens that a16z can sell at the top while redistributing money from gamblers to whales, HFTs, and casino owners. https://www.cnbc.com/...
@therealjpk @therealjpk on x
Doubling down! https://twitter.com/...
@cryptomanran Ran NeuNer on x
The smart money is raising more than ever and now they are getting much better deals! https://www.cnbc.com/...
@ftx_access @ftx_access on x
Still some dip buyers https://www.cnbc.com/...
@tsuvik Vikas SN on x
👀 a16z is announcing new funds with the same pace (or even faster) than startups announcing new funding rounds https://twitter.com/...
@joonian Wong Joon Ian on x
these funds seem to be getting... bigger? https://www.cnbc.com/...
@ariannasimpson @ariannasimpson on x
As @cdixon wrote, we think the golden era of web3 is just beginning. Programmable blockchains are advanced, a diverse range of apps have tens of millions of users, and waves of world-class talent are pouring into web3 every day.

Chronicles