Andreessen Horowitz, a well-known private American venture capital firm, has jumped on the cryptocurrency fund bandwagon. The Menlo Park, California-based company announced its launch of the “a16z Crypto Fund,” a $300M venture fund that will invest in crypto companies and protocols, in a blogpost.
Andreessen Horowitz’s Cryptocurrency Investments
The company has already made big investments in a good number of startups in the cryptocurrency space, including one in leading cryptocurrency exchange Coinbase in 2013. In February of this year, the firm invested in a startup that is building a blockchain-based internet computer. (See also, Blockchain-Based 'Internet Computer' Gets $61M from Andreessen.)
Comparing blockchain technology and cryptocurrencies to the likes of the evolution of personal computers in the 70s, the Internet in the early 90s, and smartphones in the late 2000s, Andreessen Horowitz goes on to explain the potential of blockchain technology and cryptocurrencies to become the next big breakthrough. As the multi-billion dollar mobile app industry is now taking advantage of the smartphone boom, Andreessen Horowitz sees similar potential for cryptocurrencies to take advantage of blockchain technology. (See also, Billionaire Marc Andreessen Backs Cryptocurrency-Focused Hedge Fund.)
The fund will take a long-term view on cryptocurrency investments. General partner Chris Dixon explains in the blogpost, “We’ve been investing in crypto assets for 5+ years. We’ve never sold any of those investments, and don’t plan to any time soon. We structured the a16z crypto fund to be able to hold investments for 10+ years.” Stating that the firm is focused on non-speculative use of crypto products and expects billions of individuals to utilize and benefit from such products and services, Dixon added that the firm plans to invest consistently over time irrespective of the market situation. It plans to even take advantage of any “crypto-winters” - a situation when the market declines - and invest more aggressively in those conditions.
The fund will be co-lead by former federal prosecutor and Assistant U.S. Attorney Kathryn Haun, who was recently named first female general partner at Andreessen Horowitz. Haun’s regulatory background is expected to be of great use to the firm’s cryptocurrency ventures. In her former role, she helped introduce the first government task force in America for crypto markets and dealings, and worked on Silk Road, an online black market and the first modern darknet market which went on to be the first high-profile cryptocurrency-related case. Haun is also on the board of directors of Coinbase and was among the first teachers of the digital currency and cybercrime course at the Stanford Law School. Citing that the firm's main focus is on the team of founders, Haun told CNBC, “We want to see crypto move beyond the speculation phase and see it eventually solve real-world problems for millions or even billions of people.” (See also, Grayscale Launches Four New Cryptocurrency Funds.)