Venture capital firm Andreessen Horowitz (a16z) is reportedly seeking to raise around $10 billion to invest in the artificial intelligence and defense industries, but crypto, long one of its flagship sectors, is notably missing.
According to a Thursday Financial Times report citing anonymous sources, a16z is aiming to raise about $10 billion for new investments, including $6 billion for investing in more mature companies, $1.5 billion for each of the company’s AI applications and AI infrastructure funds, and over $1 billion for a defense and manufacturing-focused vehicle.
No crypto-focused fund was mentioned, marking a rare omission for one of Silicon Valley’s most influential backers of the digital asset industry.
A16z has been one of the most influential venture capital firms in shaping the modern crypto ecosystem. The company runs a dedicated a16z Crypto arm, which backed heavyweights including Coinbase, Uniswap, Dapper Labs, and MakerDAO, while actively lobbying for favorable US crypto regulation.
Crypto’s complete exclusion from its purported plans is even more surprising, given the bullish tone in its State of Crypto report published Wednesday. In the report, the venture capital firm highlighted that the crypto market is now global and growing, stablecoins are going mainstream and financial institutions have “embraced crypto.”
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Crypto exclusion doesn’t mean abandonment
Despite crypto’s absence from the reported $10 billion raise, a16z has not stepped away from the sector entirely. Earlier this month, the firm’s crypto investment arm invested $50 million in Jito, a liquid staking protocol that underpins the Solana network.
In mid-April, the company also announced a $55 million investment in LayerZero, a Web3 company that runs a crosschain messaging protocol. In fact, the investment company is so bullish on the US crypto ecosystem that in late January, it announced the closure of its United Kingdom offices to instead focus on its United States crypto efforts.
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Venture capital in crypto is controversial
Venture capital funding in the crypto industry has long been a contentious topic. Still, Ethereum co-founder Joseph Lubin recently highlighted the importance of venture capital funding for ecosystem development.
Lubin admitted that the main goal of venture capital companies is to “suck as much value as possible from the Ethereum and broader ecosystem.” Still, he said that their secondary goals include “progressing the systems toward rigorous decentralization” and claimed that there is “no reason for concern.”
His comments follow Ethereum developer Federico Carrone saying that the growing influence of companies such as venture capital firm Paradigm could be “tail risk” for the entire ecosystem. “I believe this will become increasingly clear to everyone in the months ahead,” he said.
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