Andreessen Horowitz, one among Silicon Valley’s highest profile enterprise capital companies, is trying to increase a fund of as a lot as $1bn to put money into cryptocurrencies and crypto start-ups, after the success of its funding in Coinbase.
The brand new fund, Andreessen’s third that’s targeted on cryptocurrency investments, is aiming to lift between $800m and $1bn from traders, in line with 4 folks with information of the method.
That may make it one of many largest swimming pools of capital devoted to crypto and probably twice the scale of its predecessor. The agency declined to remark.
Andreessen’s fundraising push comes as different cryptocurrency traders are elevating giant battle chests, spurred on by a surging market in bitcoin, ethereum and different digital belongings.
Cryptocurrency enterprise capitalists have begun to grasp positive factors from Coinbase, the digital foreign money trade which went public earlier this month and is at the moment valued at nearly $60bn, and from direct investments in digital currencies which have surged in worth during the last 12 months.
These returns have inspired institutional traders resembling endowments and foundations to resume their bets on the rising applied sciences, regardless of the unsure regulatory surroundings for big swaths of the market.
Pantera Capital, one of many earliest cryptocurrency funding companies, is aiming to lift $600m for a brand new blockchain fund that may mix investments in non-public corporations and tradable tokens, it has said. Pantera’s newest enterprise fund raised $175m in 2018 and was price 3.8 occasions that quantity as of January, in line with its website.
Final month, traders together with Sequoia Capital China dedicated $225m to the second cryptocurrency fund raised by Dragonfly Capital, greater than doubling the sum Dragonfly raised for its debut model in 2018.
Andreessen’s fundraising haul would rival the pool of capital raised by Paradigm, a cryptocurrency funding agency began by Coinbase co-founder Fred Ehrsam and former Sequoia Capital associate Matt Huang in 2018.
Paradigm has raised a complete of $1bn from traders together with the endowments of Harvard and Yale universities, in line with Pitchbook knowledge. The agency invests from an open-ended fund construction that doesn’t require it to return capital by a hard and fast date.
Coinbase’s direct itemizing on the Nasdaq trade this month produced a windfall for early traders and staff, who’ve seemed to reinvest their positive factors in new ventures. The corporate’s market worth reached $75.9bn in early buying and selling, although it has drifted about 20 per cent decrease as non-public shareholders offload their stakes.
Based in 2009 by Marc Andreessen and Ben Horowitz, Silicon Valley-based Andreessen Horowitz was an early investor in cryptocurrency teams together with Coinbase and Ripple by way of its conventional funds.
Andreessen’s stake in Coinbase has been one among its largest successes, and was price $11.2bn on the value of Coinbase’s first trades. The agency has offered near $120m in shares since Coinbase went public, in line with regulatory filings.
After elevating its first fund devoted to cryptocurrencies in 2018, Andreessen turned a significant investor in so-called decentralised finance tasks and was one of many founding members of the Fb-backed Libra challenge, now often called Diem.
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Andreessen transformed to a registered funding adviser in 2019, a regulatory distinction that gave it extra flexibility to put money into cryptocurrencies and different belongings that enterprise funds are normally restricted from holding in giant portions. The agency managed $35.8bn in regulatory belongings on the finish of final yr, a submitting confirmed.
On the high finish of its fundraising vary, Andreessen’s third cryptocurrency fund can be practically double the scale of its final car, which raised $515m one yr in the past.