Venture capital firm Andreessen Horowitz (a16z) is reportedly aiming to raise about $10 billion to invest in artificial intelligence and the defense industry, but cryptocurrencies, which have long been one of the company’s main sectors, are particularly lacking.
A16Z is aiming to raise about $10 billion in new investments, including $6 billion in investments in more mature companies, $1.5 billion each in the company’s AI applications and AI infrastructure funds, and more than $1 billion in defense and manufacturing-focused vehicles, according to a report in the Financial Times on Thursday, citing unnamed sources.
There was no mention of crypto-focused funds, an unusual omission for one of Silicon Valley’s most influential backers of the digital asset industry.
A16z is one of the most influential venture capital firms in shaping the modern cryptocurrency ecosystem. The company operates a dedicated a16z crypto division, backing leading companies such as Coinbase, Uniswap, Dapper Labs, and MakerDAO, and actively lobbying for favorable U.S. cryptocurrency regulation.
Given the bullish tone of the State of Cryptocurrency report released on Wednesday, it is even more surprising that Crypto Inc. was left out of the purported plan entirely. The venture capital firm emphasized in a report that the cryptocurrency market is now growing globally, stablecoins are becoming mainstream, and financial institutions are “embracing cryptocurrencies.”
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Exclusion of virtual currencies does not mean abandonment
Despite the absence of cryptocurrencies from the reported $10 billion raise, a16z is not leaving the sector completely. Earlier this month, the company’s crypto investment arm invested $50 million in Jito, the liquidity staking protocol that powers the Solana network.
In mid-April, the company also announced a $55 million investment in LayerZero, a Web3 company that operates a cross-chain messaging protocol. In fact, the investment firm is so bullish on the US crypto ecosystem that it announced in late January that it would be closing its UK office to focus on US crypto efforts.
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Venture capital in the cryptocurrency field is controversial
Venture capital funding in the cryptocurrency industry has long been a controversial topic. Still, Ethereum co-founder Joseph Rubin recently emphasized the importance of venture capital funding for ecosystem development.
Rubin acknowledged that the venture capital firm’s main goal is to “siphon as much value as possible from Ethereum and the broader ecosystem.” Still, he insisted there was “no reason for concern” as his second goal included “moving the system towards strong decentralization”.
His comments come after Ethereum developer Federico Carone said the growing influence of companies such as venture capital firm Paradigm could pose a “tail risk” to the entire ecosystem. “I believe this will become increasingly clear to everyone in the coming months,” he said.
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