Why a16z should we launch the $4.5 billion Web3 fund in the bear market?

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come fromΒ TechcrunchBy Lucas Matney

Compiled by: Moni, daily planet

Original title:γ€ŠA16z: Why did we launch the $4.5 billion Web3 fund in the bear market》

In the past few weeks, the cryptocurrency market has experienced great shocks, ust / Luna collapse, the dim prospect of defi , and the sharp decline of BTC , which seem to make it difficult to see the prospect of this emerging industry. However, for venture capitalists who are optimistic about the future of Web3, their pace has not stopped.

On May 25, Andreessen Horowitz (a16z) announced that it had raised $4.5 billion for its fourth encryption fund, "crypto fund IV". The agency plans to allocate $1.5 billion for seed investment in Web3 and $3 billion for more traditional venture capital. The fund is by far the largest personal encryption fund raised in venture capital, making a16z managed encryption funds worth more than $7.6 billion.

So why a16z will Web3 be set up to invest in "Big Mac" during the bear market? There may be two reasonsβ€”β€”

1、 A16z market position challenged

About a year ago, a16z announced the launch of crypto fund III, which was about $2.2 billion at that time. In terms of scale, the new fund launched this time has doubled that of the previous encryption fund, which shows that a16z limited partners are increasingly interested in expanding the investment exposure of encryption startups.

But in fact, in the past year, the encryption market has undergone great changes and a16z also experienced many unexpected challenges. Especially in recent months, encryption native institutions such as paradigm # and electric capital have further risen, and they have raised a lot of funds to challenge a16z's market dominance.

Not only that, a16z but also endure the dilemma of staff leaving. In January this year, a16z partner Katie Haun announced her withdrawal and took away a group of colleagues to form Haun ventures. The fund successfully raised US $1.5 billion, US $500 million for early investment (direct investment in equity and token) and US $1 billion for "accelerator" fund.

It is reported that the US $4.5 billion crypto fund IV will be headed by a16z general partner Chris Dixon. A few months ago, Chris Dixon had a heated debate with Twitter founder Jack Dorsey and others on social media to defend the Web3 industry from critics, so the public image has been greatly improved.

Chris Dixon is very optimistic about the development of Web3. He once said that the ownership and control in Web3 are decentralized, and users and builders can "own" Internet services by owning NFT and ft. "NFT" gives users part of the power of ownership of the Internet. Web 3 provides a new way, combining the advantages of previous times. Now is the early stage of this movement and a good time to participate.

2、 Help crypto start-ups get enough capital to deal with the storm in the bear market

In recent weeks, the collapse of Terra # ecosystem and its stabilizing currency # ust has had a great impact on the entire encryption market, and many investors and entrepreneurs have become more skeptical about this emerging industry. As ust evaporated tens of billions of dollars in market value almost overnight, many people called on insufficient federal legislators to speed up the formulation of legislation to control the encryption industry.

On the other hand, the global market value of cryptocurrency has dropped from a high of nearly $3 trillion to $1.3 trillion. Many people are confused about a16z launching a huge Web3 fund in this downward stage of the market. After all, the cooling of the market usually scares away traditional companies from continuing to bet on cryptocurrency. However, a16z crypto partner Arianna Simpson explained:

"Other investment companies are likely to withdraw, but we won't. from a16z the scale of the new fund of $4.5 billion, we can see that we are excited about this industry and firmly believe that there will be good development in the future."

In fact, as the global stock market has also suffered a heavy blow recently (Robin Hood , and , coinbase , both fell by more than 75% compared with their debut), many encryption investors believe that the prospect of the industry is not so optimistic. Observers predict that the era of global financial turmoil is coming, and there will be problems not only in the encryption industry, but also in other financial fields.

Interestingly, when a16z launched the last blockchain fund, the encryption market was also on the verge of collapse, but it recovered soon after a16z entered the market, even pushing the prices of bitcoin and Ethereum to an all-time high. Frankly speaking, during the market downturn, many new entrepreneurs will feel uncertain about the future and worry that there will not be enough funds available during the "encryption winter". In this regard, a16z obviously has great advantages, because this "veteran venture capital" has a lot of capital, which can help its portfolio continue to expand its business scale.

As Arianna Simpson said:

"We cannot predict the future of the encryption market, but a16z will work closely with our portfolio companies to ensure that they have enough capital to deal with the storm in a bear market."

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