Andreessen Horowitz to raise $450m for second cryptocurrency fund

Andreessen was one of the first venture firms with a large fund dedicated to cryptocurrencies, raising $350 million in 2018

                                

Andreessen Horowitz is aiming to raise $450 million for a second cryptocurrency investment fund, consolidating the venture capital firm’s commitment to the sector.

Andreessen is known for backing social media platforms such as Facebook and Twitter. It was one of the first venture firms with a large fund dedicated to cryptocurrencies, raising $350 million in 2018 for start-ups working on the blockchain technology underpinning digital coins.

The fund has also been one of the strongest backers of Facebook’s Libra currency project. It has a seat on the association’s board.

Andreessen could finalise the new fund in about a week but has not yet placed a hard cap on its size, a person familiar with the matter said. The firm declined to comment.

Venture capital investment in blockchain technologies grew more than threefold to almost $4.3 billion in 2018, according to CB Insights data. It dropped by one third last year following an extended rout in bitcoin.

Andreessen is seeking the new funding less than two years after raising its first version. Venture capital firms typically seek new funds about every three years.

The company’s first cryptocurrencies fund has largely focused on new protocols such as the computing company Dfinity and projects involving digital currencies backed by reserve assets such as the US dollar.

Andreessen said it designed the first fund to be able to hold investments for more than 10 years, longer than the typical venture fund, and to purchase digital coins and tokens directly.

The firm registered as a financial adviser last year. This subjected its partners to greater regulatory scrutiny but allowed it to invest in cryptocurrencies and tokens with fewer constraints.

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