Today a16z crypto, part of the Andreessen Horowitz venture firm, announced its fourth crypto fund with a massive $4.5 billion to invest. A third of the funds will go to seed investments, with the balance to venture investments.
This is a16z’s fourth crypto fund following the launch of a $2.2 billion fund in June last year and brings its total funds in the sector to $7.6 billion.
Its early investments included the likes of Coinbase and Dapper Labs, with big winners from the NFT boom including OpenSea, Bored Ape creator Yuga Labs and Axie Infinity developer Sky Mavis. The funds have multiple bets on layer 1 blockchains, including Avalanche, Celo, Flow, Near, and Solana.
Partner Chris Dixon described the timing as the “golden era” for the sector, given that blockchains have advanced sufficiently and the amount of talent that entered the sector over the past year. “That’s why we decided to go big,” he wrote.
Previously the a16z crypto team made substantial investments in crypto games, and last week it launched a dedicated $600 million games fund. However, it’s unclear whether that fund will cover blockchain games.
While venture firms have long helped startups with go-to-market strategies and talent, a16z has a massive footprint in the legal and regulatory area, combining both lobbying and research on issues such as legal structures for decentralized autonomous organizations (DAOs). Its crypto operating functions include research, engineering and security.
As we wrote, when a16z announced its third fund, incumbents already face an innovator’s dilemma. But in the past, they have had better access to funding compared to startups. With the combination of crypto markets and massive venture funds such as these, the disruptive potential of blockchain and crypto grows by the day.