a16z – The most active investment fund in the market
a16z is a venture capital firm in Silicon Valley, California. This investment fund is no stranger to Crypto market participants because of its dynamic activity.
So what exactly is Andreessen Horowitz or a16z an investment fund? What projects does Andreessen Horowitz’s portfolio include? What is Andreessen Horowitz’s investment style? Let’s learn all about Andreessen Horowitz through the following article.
Andreessen Horowitz Fund (a16z) in the crypto market
This is an investment fund founded in 2009 by Marc Andreessen and Ben Horowitz.
Andreessen Horowitz’s operating principle is to understand startups’ problems- understand the founders’ issues when running a startup. The general partners – or fund operators – have all been CEOs and CTOs of famous technology startups, so this investment fund understands the problems of the startups they invest in to provide timely support time.
The investment vision of the project is highly long-term. Andreessen Horowitz has been investing in crypto since 2013, and starting out as an investment fund (Venture Capital) and not a hedge fund, they target investments withholding periods greater than 10 years.
They invest in crypto projects regardless of the market situation, because they believe that no matter how the short term plays out, the market will grow in the long term. They support startups in a variety of ways: recruitment, operations and technical expertise, legal issues, communications and marketing, general administration.
They not only focus on investing in a specific area, but also invest in many areas in the crypto market: Layer 1, DeFi, NFTs, gaming, DAOs, social tokens, decentralized social network, Web3, and even new fields that don’t even have names.
In addition to Andreessen and Horowitz, a16z is led by many top talented people in different fields. Team will be divided into the following clear categories:
Project Layer 1
Invested Layer 1 projects (besides Bitcoin and Ethereum) include: Avalanche, Celo, Chia, Difinity, Filecoin, Near, Oasis Network, Keep Network, Handshake, Helium.
In layer 1 deals, a16z is usually not an investment fund that joins from fundraising rounds too early, they often join from round 2, number 3. However, every time they join, they are always the one. investment lead round, the investment round usually has a large amount of money and shows the responsibility, the “commit” of the fund to the project (investing more than once).
The time to participate in these funding rounds of a16z is also in 2017 to 2020, and in 2021 it seems they have no Layer 1 investments. This proves that this fund bet on the development of Layer 1 to replace Ethereum quite early, and they have been quite successful in that bet when Layer 1 has grown rapidly and strongly from the beginning of 2021 to now. .
Project on exchange platform
Invested exchange projects include (including DEX, CEX, Derivatives)
a16z doesn’t have many investments in AMM DEX or CEX or Derivatives, only investing in a few leaders like Uniswap or dYdX.
Stablecoin projects invested include: MarketDao, Trust token, Basis, Reflexer, Fei Protocol, Angle Protocol.
Among them, only one deal was successful, one project failed and investors returned money. Investments also mostly happen in 2021, except for the first time investing in Trust Token in 2018 and buying MakerDAO’s MAKER token.
It can be seen that investing in stablecoin solutions does not seem to be the fund’s strength, when most of the protocols they invest in are not having good growth in market share, number of stablecoins in circulation or volume. users (except for Angle Protocol, which has not been launched for a long time, so it cannot be confirmed, and MakerDAO has been successful with stablecoin DAI).
Project on Lending/Yield
Lending/Yield Farming projects invested include: TrustToken, MarketDao, Compound, Goldfinch.
It can be seen that the investment deals in lending protocols are not many, but these deals are of relatively high quality with 2 protocols in the top lending protocols in the market, MakerDAO and Compound.
Most of the time investing in these deals is from when the market was relatively stagnant in the years 2018-2019 (Compound and MakerDAO), and they no longer invested much in the lending segment in 2020, 2021, show their vision of lending in DeFi.
Ethereum Layer 2 Solution Project
Projects invested in infrastructure include: Optimism, Matter Labs.
A16Z was not an early investor in these projects, but invested heavily in the later rounds of these Layer 2 solutions.
Project about NFT/Metaverse/Gaming
The NFT/ Metaverse/ Gaming projects invested include many different large and small projects, here will mention a few typical projects.
Includes: Crypto Kitties, Dapper Labs, OpenSea, Sky Marvis, Royal, Forte,…
Most of a16z’s investments in NFT / Metaverse / Gaming projects are at a fairly high project valuation (OpenSea two rounds Series A and B, Dapper Labs in the round with a valuation of $ 2 billion, … ).
In addition to Crypto Kitties, the projects they invest in are all in round from Series A onwards (when the project has formed, operates stably and has revenue, and invests to expand the project and customer base) and invest in 2021. They still continuously invest in new NFT/ Gaming/ Metaverse projects from 2021 to the present time.
This further strengthens a16z’s long-term investment thesis, because they really believe in the potential of the project and mass adoption of this segment, because if they only invest in a short-term investment, for continued investment Strong investment when the “circle crypto” is coming to an end will not make sense in terms of profits.
Infrastructure and data projects
Leading projects in the infrastructure and data sectors include: Arweave, Deso Labs, Nym Technologies, WorldCoin, Nansen, Kosen Labs, Aleo, Forta, Protocol Labs, Alchemy.
Infrastructure and data projects are heavily invested and spread throughout their investment journey, and the deals are also growing, culminating in the recent Alchemy investment.
This is a large segment and needs continuous improvement, so they have been spreading and investing in infrastructure all the time.
Investment Trends by Andreessen Horowitz
Although they invest in many areas, from 2021 until now, they have devoted a lot of attention to projects in the NFT/ Gaming/ Metaverse array with many projects with large raise amounts, and many fundamental projects. infrastructure, data and layer 2 solutions for Ethereum.
Most of the deals announced by a16z in the past 3 months have increased sharply in both the number and amount of project investment, with the explosion of NFT/Gaming and Metaverse.
a16z’s capital allocation strategy
According to the statistics of Crunchbase, a16z fund invests in many different fields, but the areas that account for the highest proportion in the portfolio are projects related to science and technology and investment deals. a16z’s investment tends to increase over time.
They have a relatively safe and careful investment strategy in the cryptocurrency market. The fund usually does not invest right from the seed round but will prioritize participating in later funding rounds such as Series A, Series B, etc. These are also funding rounds when the project has had specific development steps. .
In addition, as mentioned above, the investment portfolio is extremely diverse, spanning all areas of the cryptocurrency market such as: GameFi, Lending, dApps,…
This is an investment fund with a large, talented and experienced team in terms of human resources. They have a thorough research and analysis process before making a capital investment decision. Moreover, they can also accompany and support startups in the startup process after investing in them. This makes most of the projects selected by a16z have quality and bring significant profits to the fund.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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