Top venture capital firm Andreessen Horowitz is doubling down on crypto, even as bitcoin and other cryptocurrencies have struggled to find footing this year.
The firm raised $300 million for its first-ever fund dedicated to crypto companies, Andreessen Horowitz announced Monday. Over two to three years, it plans to put that money in everything from early-stage coins and tokens, to later-stage networks like bitcoin or ethereum, and will hold those investments for up to 10 years.
Chris Dixon, general partner at Andreessen Horowitz, said the firm is taking a long-term and “patient” approach in the space.
“We’ve experienced ups and downs in the cryptocurrency market, and expect there will be many more,” Dixon told CNBC Monday. “There’s potential in the technology, and some of the downturns can be the best investments.”
He described it as an “all-weather” fund that they plan to invest consistently over time, regardless of market conditions. Even if bitcoin prices dropping 50 percent this year signaled a “crypto winter,” Andreessen Horowitz will keep investing aggressively, Dixon said.
“There are wild fluctuations in the price, and we see that as an opportunity,” Dixon said. “We’ve been unphased and investing consistently over time.”
Dixon drew parallels to 2009 and 2010, when there was an influx of entrepreneurs and developers working on smartphone apps. Similarly he pegged crypto in 2018 as "one of those great times to invest.”
Andreessen Horowitz made its first investment in the space through Coinbase in 2013, and has yet to sell any of its investments in crypto, the firm said. For this fund, investment criteria are flexible and will range across different stages, asset types and geographies, Dixon said.
“We believe we are still early in the crypto movement,” he said.
The Menlo Park-based company is also bringing on its first-ever female general partner, former U.S. Department of Justice federal prosecutor Katie Haun, to lead the new fund. Haun helped launch the Justice Department's first government task force for crypto, and worked on the first high-profile cryptocurrency-related case, Silk Road. She is also on the board of directors of Coinbase and taught Stanford Law School’s first-ever course on digital currency and cybercrime.
Haun's regulatory background should be especially helpful as start-ups grapple with how their cryptocurrencies could be seen by U.S. regulators.
SEC Chairman Jay Clayton said earlier in June that bitcoin and ether are not securities. Still, many but not all initial coin offereings are securities and will come under the regulatory control of the and relevant securities laws, he said. Clayton had in March that all ICOs constitute securities, and reiterated that Wednesday saying "if it's a security, we're regulating it."
While they’re working with entrepreneurs on regulation, Haun said the firm's main focus is on the team of founders, since many projects are based on an underlying protocol and some projects aren't live yet.
“We want to see crypto move beyond the speculation phase and see it eventually solve real-world problems for millions or even billions of people,” she said.