Asset manager Andreessen Horowitz recently launched a second venture capital investment fund in blockchain projects worth US$ 515 million, surpassing its initial forecast of raising US$ 450 million. The funding comes less than two years after the first US$ 350 million fund. And it shows the growing demand for investments in a new cycle of blockchain projects.
A post published on the company’s blog states that a key feature of crypto market cycles is that each cycle drives the following. For example, Ethereum was created in the 2013 cycle and became the basis for the initial cryptocurrency offerings that drove the cycle in 2017. The company understands that this fund will finance a next generation of projects and so on.
In addition, the funding which was higher than expected shows that investors are agreeing to take risk in the cryptocurrency market, even with the coronavirus crisis. In fact, the cryptomarket is resisting the crisis so far, confirming the status of safe Heaven in times of mistrust of the international financial system.
It is worth remembering that venture capital companies generally seek new funds every three years, but have recently accelerated the pace due to the expansion of new investments from blockchain companies.
Andreessen pioneers blockchain venture capital
Best known for supporting social media companies such as Facebook and Twitter, Andreessen was one of the first venture capital managers with a large fund dedicated to cryptocurrency companies. In 2018, the company raised US$ 350 million for blockchain start-ups. The fund was also one of the most loyal defenders of Facebook’s Libra currency project and holds a seat on the board of the Calibra association.
The manager is also relevant in the cryptocurrency market for having made an initial investment in Coinbase exchange, valued at about US$ 8 billion. Its first cryptocurrency fund focused on new protocols, such as Dfinity, and in stablecoins.
The investment in blockchain technology venture capital grew more than three times to nearly US$ 4.3 billion in 2018, according to CB Insights data. However, it fell by a third last year despite the appreciation of the bitcoin. No data on 2020 are available yet.
Raising funds in line with the thesis of the new normal
Andreessen Horowitz’s second funding in less than two years is in line with Transfero’s special investment thesis. By realizing the acceleration of new blockchain projects, the manager shows that the international financial system is migrating to cryptocurrency-based solutions.