Andreessen Horowitz (a16z) has launched its fourth crypto fund to back startups in the Web3.0 ecosystem. The fund christened the Crypto Fund 4 is floated with a $4.5 billion capital base. While the company said a total of $1.5 billion will be used to fund growth amongst startups at the seed stage, the bulk ($3 million) will be used in venture financing.
That a16z is betting on the Web3.0 ecosystem with a capital base larger than its previous direct investments in the space comes off as a very surprising move, considering the current downturn of the broader ecosystem.
a16z Backing Crypto in Spite of Bear Sentiments
While the current state of the industry is making a lot of investors track back, a16z is more bullish than ever.
“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,” Arianna Simpson, a general partner at Andreessen Horowitz told CNBC in a phone interview.
The battery the crypto ecosystem is experiencing at this time is also reflective of the ongoing plunge in the stock. Coinbase and Robinhood, two major brokerages offering crypto, and a mixture of both have seen their shares slump by more than 70% since they both went public.
Simpson said the company will be focusing on startups that are building the technological infrastructure upon which the growth of the Web3.0 world will be focused on. This strategy she noted will distinguish its investment approach in this turbulent time.
“The technical diligence and the other kinds of diligence that we do are a key part of making sure that projects meet our bar,” she said. “While our pace of investment has been high, we continue to invest really in only the top echelon of founders.”
a16z recently reiterated the underlying importance of the Web3.0 ecosystem in a report, a publication that came shortly after it unveiled its $600 million investment fund for the gaming ecosystem. With a portfolio that spans Coinbase, OpenSea, and Avalanche amongst others, the latest crypto fund can help a16z power the next generation of Web3.0 mega unicorns.