Andreessen Horowitz is betting big on cryptocurrency—again.
Two years after raising $300 million for its first investment fund devoted to Bitcoin and other cryptocurrency projects, the Silicon Valley venture capital firm has raised a second similarly themed fund. The new vehicle, which closed Thursday and focuses on blockchain technology, the database innovation behind cryptocurrencies, totals $515 million.
“It’s very rare that major, new computing paradigms come along, and we think this is on the scale of cloud and mobile for the Internet,” notes Chris Dixon, coleader of the fund. He says he expects to see the debut of many new blockchains—including those from the previous fund’s bets, such as the hyped-up “world computer” Dfinity—in the coming year.
Andreessen Horowitz was one of the earliest VC believers in Bitcoin and blockchain technology. In January 2014, its cofounder, Marc Andreessen, who cofounded onetime Internet browser king Netscape and now sits on Facebook’s board, extolled digital money’s virtues in an influential piece for the New York Times.
Since then, Andreessen Horowitz has invested in cryptocurrencies like Bitcoin and Ethereum, as well as other crypto-inspired projects, such as Maker DAO, a stablecoin developer; Compound, a crypto lender that enables users to earn interest on their deposits; and Celo, a mobile payments startup. Other bets include Coinbase; Protocol Labs, which is building Filecoin, a decentralized file storage alternative to Dropbox; and crypto custodian Anchorage.
Andreessen made a bold move last year by becoming a registered investment adviser, a distinction granted by the Securities and Exchange Commission that gives it more flexibility to invest in things like crypto tokens.
Katie Haun, a former federal prosecutor who coleads the crypto fund and sits on the board of the Facebook-corralled Libra Association, declines to disclose the first fund’s performance to date, but notes that the firm plans to hold on to its bets for the long term, as long as 10 years.
Haun also puts in a good word for the Libra Association. One of the first fund’s investments, Libra has been gaining new members in recent months, including Shopify and Checkout.com, despite losing bigwigs like Visa, PayPal, and Mastercard last year.
“We’ve come a long way from when the Libra Association was first announced, and we’ll start to see that playing out in coming months,” Haun says.
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