A16z raises US$ 4.5 billion Web3 and crypto fund

A16z announced its latest mega fund to take advantage of the crypto market downturn.
May 27, 2022 - Cynthia Chung

Andreessen Horowitz (A16Z) has raised US$ 4.5 billion to pour into Web3 and crypto markets, double the size of its last fund. US$ 1.5 billion of the fund will be committed to early-stages seed investment while the remaining US$ 3 billion will go towards later stage venture investments.

This marks the fourth fund raised by the VC firm’s for Blockchain-related initiatives, bringing its total raised to US$ 7.6 billion to date. The new fund showcases the growing interest among the firm’s partners in increasing their exposure to crypto startups. The firm stated that one-third of the fund will be earmarked for seed initiatives exclusively.

Founded over a decade ago, a16z has established itself as one of the biggest venture capital firms with a focus on the cryptocurrency industry. It has launched multiple Blockchain-related initiatives in years past, including its $2.2 billion Crypto Fund III from less than a year ago. The first fund came during the crypto bull market and the latest is announced amid a bear market and other challenges the firm is facing.

Addressing the cooling crypto market, a16z’s Arianna Simpson said that unfavourable market conditions provide the ‘best opportunities’ in an interview with CNBC, ‘Bear markets are often when the best opportunities come about when people are actually able to focus on building technology rather than getting distracted by short-term price activity.’ she explained.

 

She also elaborated on the requirements projects have to fulfill to receive backing from a16z, saying that ‘The technical diligence and the other kinds of diligence that we do are a key part of making sure that projects meet our bar. While our pace of investment has been high, we continue to invest really in only the top echelon of founders.’

A16z is well-known for its early investments in Lyft, Pinterest and Slack, with its first mega crypto investment with Coinbase back in 2013. The firm has since backed more crypto and NFT startups such as Avalanche, Dapper Labs, OpenSea, Solana, Alchemy and Yuga Labs as well as Flowcarbon last week. 

 

Photo: Flickr

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