Andreessen Horowitz’s crypto unit, known as a16z crypto, has just announced clearing $4.5B for its fourth fund. The team which has been investing in crypto since 2013 believes that this selloff is a slight hiccup amid the commencement of the golden era of Web3. a16z crypto has now raised over $7.6B in its crypto/Web3 funds since its founding.
With the sufficient and ever-expanding advancements of programmable blockchains coupled with the widespread use of a diverse range of applications by users, Web3 certainly presents a tempting upside from an investor’s point. Crucially, a massive wave of world-class talent has shifted its focus to Web3 over the last year. These personalities are brilliant, driven and passionate about building a better internet.
The breakdown of the $4.5B
The a16z crypto team intends to appropriate approximately $1.5B toward seed investments and the remaining $3B to venture investments with the aim of supporting promising Web3 startups at every stage. The team already has shown interest in Web3 games, creator monetization, NFT communities, DAOs & governance, DeFi, decentralised social media, self-sovereign identity, layer 1 and layer 2 infrastructure, bridges, privacy, regenerative finance, new applications of ZK proofs, decentralised content & story creation, as well as many more areas.
The Web3 investor also hopes to keep growing its operating teams in an effort to provide the best services to founders. Its research and engineering team assists its portfolio companies to solve their most important technical challenges in fields like cryptography, protocol design, mechanism design and tokenomics; as well as conducting original research projects to advance the science & tech of the internet’s next generation expects to be a major beneficiary.
Other teams such as its security team which helps in areas like smart contract auditing and formal verification, along with talent, legal and go-to-market teams also expect to scale operations. a16z brags backing Yuga Labs, the creator of the famed Bored Ape Yacht Club NFTs as well as startups such as Kiln which enables institutional staking & Improbable, a metaverse tech firm that solves the challenge of building virtual worlds.
The fire still burns
Since the early days of computing in the 1940s, major computing cycles have been a feature about every 10-15 years. They included the 80s PC rush, the 90s internet bubble and the mobile computing craze in the 2000s. A16z firmly believes that blockchain technology is the fuel of the next major computing cycle, dubbed Web3.
A highlight of these computing cycles is their “golden eras” which saw the right mix of talent, viable infrastructure and community knowledge team up to usher the world into the new norm. With mobile computing, for instance, the golden era was 2009-11, when titans like Uber, Venmo, Snap and Instagram emerged. Golden eras contribute to the formation of legendary teams, the hatching of big ideas and the building of great products.
The fund, led by Chris Dixon, is certainly braced with its hefty war chest of capital that’ll enable it to back its present & potential portfolio companies. Uncertain times ahead have already had plenty of new founders concerned about the availability of capital hoping that this doesn’t spill over into full-out crypto winter.