Andreessen Horowitz partner Marc Andreessen
Justin Sullivan | Getty Images
Andreessen Horowitz is launching a multibillion dollar fund to invest in a volatile ecosystem, he is betting it will be as influential as the internet.
The Silicon Valley venture capital firm, founded by Marc Andreessen and Ben Horowitz, announced its new $ 2.2 billion cryptocurrency-focused fund on Thursday. He plans to deploy this capital in blockchain and digital asset start-ups.
“The size of this fund is a testament to the scale of the opportunity before us: crypto is not only the future of finance but, as with the internet in its infancy, it is on the verge of transforming all aspects of our lives, “Katie Haun and Chris Dixon, the partners who run Andreessen’s cryptocurrency group, said in a blog post.
The company’s first crypto-focused fund was launched three years ago, during what is now known as the “crypto winter.” That year, the value of bitcoin rose by around 80% from its highs in 2017. The latest fund also comes at another bearish moment for bitcoin.
The globally-sourced cryptocurrency has lost about half of its value since peaking nearly $ 60,000 in April. This week alone, he’s on track for a 20% loss. Haun and Dixon noted the volatility of the asset class and said that “prices can fluctuate, but innovation continues to increase with each cycle.”
“We believe the next wave of IT innovation will be crypto-driven,” the partners wrote, adding that they are “radically optimistic about the potential of crypto.”
The company is known for its early bets on companies like Facebook, Instagram, Lyft, and Pinterest. Andreessen Horowitz took his first step into the digital asset space via Coinbase in 2013. Coinbase went public via direct listing this year, and is down around 50% from its highest trading day.
Andreessen Horowitz is also an early investor in the Facebook-backed libra digital currency project, now known as diem, which has undergone a series of rebranding and faced opposition from global regulators. .
The company has stakes in companies like OpeanSea and Dapper Labs, fueling the recent NFT boom and said it plans to focus on “decentralized finance.” Also known as “challenge,” a term used to describe traditional financial applications, such as lending or banking, based on the same technology that underlies bitcoin. The company said it plans to hold onto these crypto investments for a decade or more.
These investments in digital assets are led by partners Haun, a former Justice Department attorney, and Dixon, who founded and ran two startups before joining Andreessen Horowitz. Haun helped launch the Justice Department’s first government crypto working group and worked on the first high-profile cryptocurrency-related case, Silk Road.
Andreessen Horowitz also announced a wave of new hires for the fund, including former head of securities and exchanges Bill Hinman, who will join the company as an advisory partner. Rachael Horwitz, who led communications at Twitter, Google and Facebook, joined as an operating partner.