Today venture capital firm Andreessen Horowitz or A16z announced it raised $515 million for a second crypto fund. That’s just two years after attracting $300 million to its first fund.
The company’s existing portfolio includes Libra, Coinbase, banking enterprise blockchain firm Axoni, custody firm Anchorage and web3 firm Dfinity.
In a blog post today, partners Chris Dixon and Katie Haun outlined the areas of interest for investing.
First off is payments. They use the oft-quoted metaphor of making sending money as easy as sending a text. “Payment blockchains could end up doing to banks what email did to the post office and what VoIP services did to long-distance carriers,” said the venture partners.
Next up is Bitcoin as a modern store of value. They cite public skepticism of government’s ability to manage the money supply.
Decentralized finance (DeFi) has started to take off with the key feature of composability. Much like with open source software where existing libraries are used to build large pieces of software, with DeFi, one can have lego-like financial services. This offers enormous opportunity, though of late, some risks have been exposed. But it’s early days.
A16z is also interested in new ways for creators to monetize their work. To date, one of the main ones that have been demonstrated with blockchain is video game companies. In-game objects can be traded and transferred between games. But there’s plenty of potential outside of games.
And last but not least is Web3, where perhaps Ethereum has been the poster child to date.
The partners conclude that this “only scratches the surface of the yet-to-be-imagined applications that entrepreneurs will dream up”.
