The crypto-focused investment arm of Andreessen Horowitz, a16z Crypto, is reportedly gearing up to raise a new venture fund for investing in blockchain and digital asset startups.
Fortune says that a16z Crypto wants to raise about $2 billion for its fifth crypto fund and finish the fundraising round by the end of the first half of 2026.
The fund will be led by investor and entrepreneur Chris Dixon, who heads the crypto division at Andreessen Horowitz.
Dixon has been one of Silicon Valley’s most prominent supporters of blockchain technology and has overseen the firm’s growing presence in the crypto investment space.
a16z crypto’s first fund dates back to 2018
a16z crypto first entered the market in 2018, when it launched a $300 million crypto fund. This move came just a little while after the massive crypto boom in 2017 when Bitcoin touched almost $20,000 for the first time.
Since then, the firm has been steadily raising the size of its funds as the interest in crypto-assets grew.
The size of every new fund that a16z crypto raises is larger than the preceding one. Nevertheless, the biggest milestone for the firm came in the year 2022, where a massive crypto fund worth $4.5 billion was launched, and this is considered to be one of the biggest venture funds that are focused on blockchain technology.
The investments made from this fund are still in progress for different crypto startups that are working in different fields, such as decentralized finance, Web3 infrastructure, digital identity, and crypto-based consumer applications.
Why a smaller fund raise now?
The new fund is expected to be smaller than the 2022 vehicle, with the $2 billion target representing less than half of the previous fund’s size.
According to sources, part of the reason for this decision is strategic. Rather than waiting years between significant funding raises, the firm is planning on running a shorter fundraising cycle.
This enables the fund to be flexible in its ability to adapt to changes in the crypto space, where changes in market cycles, laws, and technology can occur almost instantly.
In the past, a16z crypto has had a fundraising cycle every one or two years. This means that a steady supply of funding is available for emerging crypto startups. However, their re-entry into the fundraising space means that they feel confident in their ability to capitalize on the next big move in the crypto space.