Although the past few weeks have seen all cryptocurrencies such as Bitcoin, ether and others losing their sheen and falling to low levels including stable coins, one firm is betting big on the technology–block chain behind cryptocurrency. Andreessen Horowitz also known as a16z is investing $4.5 billion in Web3 as it is confident that blockchain technology will see greater success in future.
Andreessen Horowitz has decreased its size as it has scaled down on its deals, these past few years. However, it has made a huge commitment in this round of investments on Web3. This is more than double the size of its last crypto fund.
The firm is showing a strong interest in promoting crypto startups. It said that one third of the $4.5 billion investment will be exclusively set aside for seed deals. The last deal by a16z called Crypto Fund III came into force less that a year ago with an investment of $2.2 billion.
Recent changes including competition from crypto-native firms such as Paradigm and Electric Capital might have been the impetus for the mega investment as these firms have also raised massive funds and are now in the position to challenge the dominance of a16z.
Crypto Fund IV is under Chris Dixon. He has vociferously defended Web3 on Twitter even if it involved heated debates with seasoned entrepreneurs and investors. The crypto debated reached a crescendo after the collapse of the Terra ecosystem. Its stablecoin UST collapsed and burst like a bubble. Many skeptics have compared all crypto currencies to a bubble that would eventually burst.
TechCrunch asked Arianna Simpson of a16z whether the cooling of the crypto market would have an effect of sending traditional firms away from betting on crypto. Simpson said that it was likely that other firms would pull back but “the size of their new fund” spoke of the “excitement and belief” the firm had on Web3 and block chain technology.
