Crypto venture capital firms have been investing at unprecedented rates lately, and Andreessen Horowitz is one of the industry leaders who are seeing tremendous returns on their investments.
Andreessen Horowitz (a16z) General Partner Chris Dixon has topped Forbes’ “Midas list” of the world’s top venture capital investors in 2022.
Rarely does a crypto or Web3 funding round close without a16z being involved in some way. According to a report from the publication on April 12, Dixon turned the $350 million Crypto Fund I into $6 billion in realized and unrealized gains in 2021. That’s a staggering 17.7x gain, according to ” Sources with knowledge of fund financials. ”
Jack Dorsey might not want to give him props. but @cdixon and a16z’s first $350 million crypto fund closed 2021 up 17.7x, a source says @Forbes. @bhorowitz predicts that in 10 years he will be considered “the best investor of his generation”. pic.twitter.com/XdqwDWEcZ2
— Alex Konrad (@alexrkonrad) April 12, 2022
In comparison, the entire cryptocurrency market itself only managed a 200% increase from $780 billion on January 1, 2021 to $2.3 trillion by the end of December of the same year.
a16z got into crypto early, leading a $25 million funding round for Coinbase in 2013. When Coinbase went public in April 2021, the company held a 15% stake after 14 additional rounds of funding. The shares were worth $10 billion on the first day of trading, resulting in a 60x return for the company. However, this was several years before Dixon’s crypto fund launched in June 2018, raising a total of $300 million at the time, according to Crunchbase.
There have been other notable investments by a16z, including decentralized exchange Uniswap, Avalanche blockchain, NFT creator Dapper Labs, and Ethereum staking platform Lido, all of which have since risen sharply in valuation or security.
Dixon, who rarely appears for interviews, told Forbes:
“It’s not my job to predict the future. My job is to be smart enough to know who the smart people are that are going to do it.”
The company is currently raising funds for the world’s largest crypto fund, valued at a whopping $4.5 billion. In January, the company announced that it plans to raise $3.5 billion for the fund, in addition to another $1 billion for Web3 seed investments.
Journalist Alex Konrad said that a16z “plans to bring its crypto fund back into the company – to make crypto core its main fund, similar to the cloud or the internet.”
Related: Venture Capital Year in Review 2021: Cointelegraph Research Terminal
Some crypto industry observers have expressed concern that too much venture capital and investment in a project could undermine its decentralization. a16z’s holdings of the UNI tokens and impact on the votes for governance have been a particular concern. But either way, the crypto industry’s most prominent VC firm is still looking for new investment opportunities in the industry.