Amid crypto market turmoil, Andreessen Horowitz announces $4.5 billion web3 fund – businesstraverse.com

Despite the bleak outlook for crypto markets based on the past few weeks of token turbulence, venture capitalists looking to plow their way into a web3 future are not taking their foot off the gas.

Andreessen Horowitz, who has undergone a bit of a transformation in recent years by scaling his workforce to scale his deals, has closed his latest crypto fund and it’s a big hit. The new $4.5 billion fund doubles the size of their latest crypto fund and shows the growing interest of the company’s limited partners in increasing their exposure to crypto startups. The company indicates that a third of the new mega-fund is exclusively for seed deals.

It has been less than a year since the company announced its $2.2 billion Crypto Fund III, and the company has endured as much change as the broader crypto market in that time. Recent months have seen crypto-native firms such as Paradigm and Electric Capital see a further rise that has raised mega-funds to challenge a16z’s dominance. The company also went through the exit of its crypto co-lead Katie Haun, who split from a16z and took a number of colleagues to launch Haun Capital with $1.5 billion split between two funds.

Crypto Fund IV is still managed by longtime GP Chris Dixon, who has seemed to bolster his public personality in recent months, most notably on Twitter, where he breathlessly defends the web3 space against his opponents, occasionally getting into fights. featuring figures like Block’s Jack Dorsey and Aaron Levie from Box. Continued skepticism among numerous investors and entrepreneurs has grown louder in recent weeks following the particularly ugly collapse of the Terra ecosystem and its stablecoin UST, which seemingly imploded overnight, evaporating tens of billions in value as calls from federal lawmakers to quickly to follow were renewed legislation aimed at curbing the industry.

When asked whether the market cooling will deter traditional companies from pursuing their crypto betting, Arianna Simpson of a16z told businesstraverse.com that “it is likely that other companies will back out,” but that “the size of our new fund speaks to the level of excitement and faith we have in this category.”

When a16z announced its latest blockchain fund, crypto markets had crashed recently, but they were soon to make an impressive comeback, pushing Bitcoin and Ethereum cryptocurrencies to new all-time highs. The outlook for crypto investors seems a little less rosy these days, as public technology stocks continue to be hammered — Robinhood and Coinbase are both down more than 75% from their debuts — and observers predict turbulent times ahead, not just for crypto but the technology industry in general.

Andreessen Horowitz’s crypto arm is well positioned with a hefty war chest of fresh capital to continue scaling operations, but uncertain times ahead have left many new founders concerned about the availability of capital amid a new potential ‘crypto. -winter’.

“We can’t predict the future state of the market,” Simpson told businesstraverse.com. “But we’re working with our companies to make sure they’re well capitalized to handle the storms.”

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