Chris Dixon, general partner of Andreessen Horowitz, talks about cryptocurrency during the TechCrunch Disrupt forum in San Francisco on October 2, 2019.
Kate Munsch | Reuters
Andreessen Horowitz plans to invest billions of dollars in new crypto companies, while digital asset markets are in a rut.
The Silicon Valley firm on Wednesday announced a new $ 4.5 billion fund to support crypto and blockchain companies. It marks Andreessen’s fourth asset class fund and raises its total revenue for crypto and blockchain investments to $ 7.6 billion. The company plans to invest in both the cryptocurrencies behind the projects and the company’s capital.
Andreessen’s first cryptocurrency-focused fund was launched four years ago, during a recession now known as the “cryptographic winter.”
“Bearish markets are often when the best opportunities come up, when people can really focus on building technology instead of being distracted by short-term price activity,” said Aressna Simpson, Andreessen’s general partner. Horowitz told CNBC in a telephone interview.
Cryptocurrencies have fallen significantly from their all-time highs, with bitcoin falling more than 50% since their November peak, and remain closely tied to the fastest-growing technology stocks, which have suffered a major drop this year. In early May, the fall of the stable currency TerraUSD shook investor sentiment and caught the attention of regulators.
But Simpson said investors shouldn’t worry about the company’s bets.
“Technical diligence and the other types of diligence we do are a key part of making sure projects meet our requirement,” he said. “While our investment rate has been high, we continue to really only invest at the highest level of the founders.”
Simpson and his partner Chris Dixon compare the long-term opportunity of cryptography to the next major computer cycle, after computers in the 1980s, the Internet in the 1990s, and mobile computing in the early 2000s.
Andreessen Horowitz is known for her early bets on Instagram, Lyft, Pinterest and Slack, and made her first major cryptocurrency investment with Coinbase in 2013. Since then, the company has supported several emerging companies in the space. cryptographic and NFT, such as Alchemy, Avalanche. , Dapper Labs, OpenSea, Solana and Yuga Labs. Earlier this week he invested in Flowcarbon, a blockchain-based carbon trading platform also backed by controversial WeWork founder Adam Neumann.
While cryptocurrencies may be struggling to regain momentum, the money flowing to private companies is at an all-time high. According to recent CB Insights data, emerging Blockchain companies contributed a record $ 25 billion in venture capital last year. This figure is eight times higher than the previous year.
The avalanche of investment in so-called “Web3” start-ups trying to create business with blockchain technology has inspired the contempt of some luminaries of technology. Two of the world’s best-known tech billionaires, Tesla CEO Elon Musk and Twitter co-founder Jack Dorsey, have been among those questioning “Web3.” Dorsey argues that VCs and their limited partners are the ones who will eventually end up owning Web3 and “will never escape their incentives,” he tweeted, calling it “a centralized entity with a different label.”
“People who are skeptical are not where we are, who are once again in the lucky position of being able to talk to these brilliant builders all day,” Simpson said. “The other thing I would add is that many of the skeptics are the titans of Web 2.0: they have been very much in a position to take advantage and benefit from closed platforms.”