Andreessen Horowitz plots second crypto fund—and it’s even bigger

It was an early investor in the likes of Facebook and Twitter—now, Andreessen Horowitz is planning to deepen its involvement in crypto.

The venture capital firm, also known as a16z, is reportedly aiming to raise $450 million for a second cryptocurrency investment fund, according to the Financial Times.

It’s believed that the fund could be finalized in under a week, and a hard cap is yet to be placed on its size, the paper said. In this market, that would be a big vote of confidence in crypto’s future.

Early adopter

Andreessen Horowitz was one of the first VC firms to establish a crypto-focused fund in 2018. That was worth a cool $350 million. Marc Andreessen was No. 22 on the Modern Consensus 100 most influential people in crypto 2020 list.

It was an early backer of Coinbase, and it has also been aggressively involved in stablecoins: digital currencies backed by fiat currencies such as the U.S. dollar. Other projects in its portfolio include the decentralized storage system Filecoin, cloud computing company Dfinity, and the embattled DeFi giant MakerDAO.

Andreessen Horowitz has also been a vocal supporter of Facebook’s Libra project, even as pushback from politicians, central bankers, and global regulators put the social network’s dream of launching a mainstream crypto product firmly on hold.

When the Libra Association launched in October, Andreessen Horowitz general partner Katie Haun reiterated the firm’s commitment to the project—acknowledging there were “important challenges to overcome.”

This backing came despite household names such as Mastercard, Visa, eBay and PayPal dropping out of the Libra Association on the back of tremendous political pressure in the U.S. and Europe.

Funding falling

The new Andreessen Horowitz fund comes as investors grapple with the economic fallout of the coronavirus pandemic.

However, as reported by Modern Consensus last month, crypto and blockchain projects are facing challenges of their own. Funding dollars devoted to the industry actually fell by 30% last year, according to research firm CBInsights, with enterprise blockchains a notable casualty when you take international payments firm Ripple out of the equation.

That same report noted how funding is flowing out of the U.S. and into China.

Editor’s Note: Modern Consensus founder Ken Kurson sits on the board of Ripple.