Venture Capital firms and cryptos have had a long-standing relationship and this is one that is unlikely to end anytime soon. According to one article, over 120 firms had made two or more investments in blockchain companies by mid-2018. While the relationship has been a long one, the level of VC interest in cryptos has surged in recent years.
Venture Capital, Cryptos, and 2021
According to Institutional Investor, VCs invested $32.8bn in crypto-based projects in 2021. The report highlighted that the total investment in 2021 was more than all previous years put together.
Some notable facts and figures from the report include:
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43% of crypto funding went into companies involved in trading, exchange services, investment, and lending of crypto assets.
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17% went into NFT startups, DAOs, Web3, and the Metaverse.
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There were also investments in custody, infrastructure, and DeFi.
What is Andreessen Horowitz?
Andreessen Horowitz, also known as a16z, is considered one of the largest venture funds in the market. In 2021, a16z launched a fund dedicated to digital assets. At the time of writing, a16z had $26.2bn in assets under management. The AUM of the Crypto funds stood at $3.1bn.
Notable active investments within the crypto portfolio include Dapper, diem, Near, OpenSea, Polychain Capital, and Uniswap. Recent exits include Coinbase (DPO: Coin).
Andreessen Horowitz Raises $9bn
Such is the position of Andreessen Horowitz in the VC space that it faces few difficulties in raising capital. News hit the wires overnight of Andreessen Horowitz raising $9bn to “further its involvement in both crypto and tech”.
Looking at the global VC investment breakdown in 2021, VCs may look to build their exposures to NFT start-ups, DAOs, Web3, and the Metaverse. Just last month, Venture Fund TGV4 reportedly invested $25m into Web3 blockchain companies. According to the report, “the firm seeks to invest in major verticals such as Infrastructure and Financial Services, including Play-To-Earn games (GameFi), metaverse, and NFTs”.
Looking at the Year Ahead
For start-ups, companies looking for late-stage investment, and investors it could be a big year ahead. Much, however, will depend upon the regulatory landscape. At the turn of the year, there has been plenty of regulator chatter and activity that suggests greater oversight is on the horizon.
China is one country that is looking to rein in growth in the Metaverse. Last month, we had reported on some well-known Chinese multinationals looking to enter the Metaverse amidst increasing government scrutiny.
This article was originally posted on FX Empire
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