WSJ: A16z venture capital fund's capital is down 40%

What’s new? Wall Street Journal reporters, citing sources, reported that the capital of the Andreessen Horowitz Venture Capital Fund (a16z) dropped 40% in the first half of 2022. According to a16z investors, other venture capital funds that have “largely avoided the risky practice of purchasing volatile cryptocurrencies” have only recorded a 10-20% drop.

WSJ article

What did the experts find out? According to PitchBook Data, a16z invested in 56 US companies last year, making it the second-largest venture capital fund behind Coinbase Ventures. To date, the company has raised more than $7,6 billion in crypto and web3 startups through four funds, the most recent of which was launched in May. General partner Arianna Simpson stated that “bear markets are often when the best opportunities come about.” However, the number of deals subsequently went down.

In Q4 2021, the fund was involved in 26 deals with cryptocurrency and blockchain projects. Combined, that number dropped to 17 in Q1 and Q2 2022. a16z invested in only seven companies in Q3, according to data published by Fortune.

What is known about Andreessen Horowitz? The fund was founded by Marc Andreessen and Ben Horowitz in June 2009 with an initial capital of $300 million. It is known for its early bets on Instagram, Lyft, Pinterest, and Slack. A16z's first major cryptocurrency investment was an investment in the cryptocurrency exchange Coinbase in 2013. Since then, the fund has supported numerous cryptocurrency and NFT startups, including Alchemy, Avalanche, Dapper Labs, OpenSea, Solana, and Yuga Labs. The fund also invests in healthcare and biotech companies. According to official data, a16z has $35 billion in assets under management.

In late April, a16z led a funding round for A startup for decentralized identification tools Spruce. The project raised $34 million. Robot Ventures, Okta Ventures, OrangeDAO, and SCB 10X also participated in the round. In May, a16z announced a new $4,5 billion fund to support crypto and blockchain companies.