The big news in tech this morning is a new a16z cryptocurrency-focused fund totaling some $2.2 billion. The new investment vehicle is worth around four times what the company’s preceding crypto fund — its second — was worth.
Andreessen’s wager on cryptocurrency is only accelerating over time as the investing house raises larger funds focused on the market with less time between them.
It’s not hard to see why a16z is so enthused about the crypto market; its investments into trading house Coinbase paid off handsomely this year when the unicorn direct listed at a huge valuation premium to its previous worth. Why not put more capital into a startup cohort that was recently immensely lucrative?
But the venture capital group is up to a bit more than just writing new checks. We can tell that much from the firm’s short post announcing its new fund. Mix in a recent interview with a16z co-founder Marc Andreessen concerning the American regulatory environment, and we can understand that the firm is not simply planning a flurry of new deals.
Defending the future of crypto
The headline figure of $2.2 billion in capital available for crypto projects is driving headlines this morning, but the dollar figure should not be a surprise. There’s essentially infinite money in the market for name-brand venture capital firms today, it appears, and with a16z’s recent Coinbase win, I doubt it was monstrously difficult for the firm to compile a new, larger crypto-focused vehicle.