Andreessen Horowitz(A16z) ‘s second crypto fund shows that the venture capitalist is targeting specific areas to invest in the cryptocurrency space.
The company said Thursday it raised a total of $ 515 million – more than the initial goal of $ 450 million – for a second fund called “Crypto Fund II”, dedicated to cryptocurrency and blockchain projects. It’s also more than the $ 300 million raised for VC’s first crypto fund, which launched in the summer of 2018.
In the blog post Announcing the new fund, a16z says it is looking at plans for next-generation payments, decentralized finance (DeFi), new monetization models and Web3 (the concept of a decentralized internet).
On DeFi, where the total value exceeded the billion dollar milestone earlier this year, a16z said it sees high potential in asset composability. “DeFi opens up the components of finance to the same recombination and experimentation that makes open source software so powerful,” he said.
This contrasts with a16z’s first crypto fund. In his initial investment thesis, the VC mentioned a handful of use cases that it considered interesting, including stablecoins, financial inclusion, and tokenization of real-world assets.
However, it included the caveat that “we are still at the start of the crypto movement. The infrastructure needs to be improved and the applications are difficult for non-early adopters to use. Many crypto applications are still seen as toys.”
Thursday’s blog post suggests a16z now considers that the industry may have reached critical mass.