Andreessen Horowitz is aiming to boost $450m for a second cryptocurrency funding fund, two folks briefed on the matter mentioned, deepening the enterprise capital agency’s dedication to the sector as the worldwide coronavirus outbreak rattles start-up buyers.
Greatest identified for backing social media corporations reminiscent of Fb and Twitter, Andreessen was one of many first enterprise corporations with a big fund devoted to cryptocurrencies, elevating $350m in 2018 for start-ups engaged on the blockchain expertise underpinning digital cash.
The fund has additionally been one of many staunchest backers of Fb’s controversial Libra forex mission and holds a seat on the affiliation’s board.
Andreessen may finalise the brand new fund in a few week however has not but positioned a tough cap on its dimension, one of many folks mentioned. The agency declined to remark.
The fundraising comes at a troublesome time for each enterprise capital and cryptocurrencies, as tech buyers develop cautious concerning the affect of coronavirus on lossmaking corporations.
Enterprise capital funding in blockchain applied sciences grew greater than three-fold to nearly $4.3bn in 2018, in line with CB Insights data, however dropped by one-third final yr following an prolonged rout in bitcoin.
Cryptocurrencies have largely weathered the coronavirus-led turmoil in capital markets. The Bloomberg Galaxy Crypto Index was up about 6.5 per cent this yr as of Tuesday, recovering from a sell-off in early March.
Andreessen is in search of the brand new funding lower than two years after elevating its first model. Enterprise capital corporations sometimes search new funds about each three years however have just lately quickened their standard tempo of fundraising following a frenzied stretch of funding lately.
The Silicon Valley-based investor gained a foothold in cryptocurrencies with an early funding in Coinbase, the funds and buying and selling firm that has been valued at about $8bn. Its first cryptocurrencies fund has largely centered on new protocols such because the computing firm Dfinity and initiatives involving digital currencies backed by reserve belongings such because the US greenback.
Andreessen mentioned it designed the primary fund to have the ability to maintain investments for greater than 10 years, longer than the standard enterprise fund, and immediately buy digital cash and tokens.
The agency registered as a monetary adviser final yr, subjecting its companions to larger regulatory scrutiny however permitting it to spend money on cryptocurrencies and tokens with fewer constraints.
Another enterprise capital corporations have put a pause on cryptocurrency investments following preliminary pleasure in 2018, seeing few near-term sensible makes use of for the expertise.
