Andreessen Horowitz’s Flagship Crypto Fund Takes A Beating

Venture capital firm Andreessen Horowitz, one of the early movers into the crypto and blockchain market, has been hit with a blizzard in this crypto winter.

The Wall Street Journal reported Wednesday the firm’s flagship cryptocurrency fund lost 40% in value in the first half of the year, according to people familiar with the matter.

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Andreessen Horowitz’s debut $300 million crypto fund raised in 2018 had been on track for a 10x return, The Information previously reported. One investment from that fund includes Coinbase, which went public last year. Coinbase shares have tumbled 77% since its debut.

The slowdown

The drastic drop in value comes as crypto is facing several headwinds. Crypto prices have sunk from their November highs, with Bitcoin losing more than 60% since then. That decline was brought about by economic concerns ranging from ballooning inflation and rising interest rates to a wobbly public market.

The private market also has faced its own tumult. After a record-setting 2021, venture capitalists and growth investors have pulled back significantly, as they look to rebalance portfolios and codify their current investments through rocky economic times.

Even Andreessen Horowitz, which has evangelized crypto at every turn, has slowed its investment cadence in crypto and blockchain in recent quarters, according to Crunchbase data. After making 53 deals in those sectors from Q4 2021 to Q2 of this year, the firm made only nine deals in the recently completed third quarter.

However, just this month, the firm led a $40 million Series B in San Francisco-based Golden, a startup building a decentralized protocol for education. Last month, the firm led a $51.5 million Series B for Miami-based crypto fraud software developer Sardine.

Despite the drop, it is unlikely Andreessen Horowitz’s and crypto’s marriage will break up any time soon. In May, Andreessen Horowitz said it raised $4.5 billion for its fourth cryptocurrency fund.

Illustration: Dom Guzman