From Internet Venture Capital Pioneer to Encryption Investment Leader: The Growth Journey of a16z

Andreessen Horowitz (abbreviated as a16z) is a venture capital firm co-founded by Marc Andreessen and Ben Horowitz in 2009. With successful investments in several well-known internet companies such as Facebook, Twitter, and Github, a16z quickly rose to the ranks of top venture capital firms in Silicon Valley.

Currently, the assets under management by a16z exceed $35 billion, with investments spanning multiple fields including artificial intelligence, biomedicine, consumer goods, encryption, enterprise services, and fintech. Among them, the a16z crypto fund, which focuses on the encryption industry, is one of the key directions for the company's development.

1. Entering the encryption field

a16z first ventured into the encryption field in 2013, at a time when many traditional venture capitalists were still skeptical about it. a16z took the lead in a $25 million Series B funding round for a trading platform and subsequently made seven additional investments. This bet not only brought substantial returns to a16z but also established its leading position in the encryption investment field.

To further deepen its efforts in the encryption field, a16z established a dedicated encryption fund, a16z crypto, in 2018. The fund has completed 5 rounds of fundraising to date, with total managed funds exceeding 7.6 billion USD:

• The first fund in 2018 had a scale of approximately 300 million USD.
• In April 2020, the second fund had a scale of approximately 515 million USD.
• In June 2021, the third fund raised approximately $2.2 billion, setting a new record for fundraising in encryption funds at that time.
• Launched the fourth fund (approximately $4.5 billion) and a Web3 gaming fund ($600 million) in May 2022

According to reports, a16z is planning to raise approximately $3.4 billion for its next early-stage and seed fund, mainly targeting emerging fields such as encryption and biotechnology.

2. Core Team

a16z adopts an all-partner system, where each specialized fund hires professionals in relevant fields as investment partners.

Chris Dixon is the founder of a16z crypto. Although he joined a16z in 2012, he has led several important investments in the encryption field for the company. In 2022, Chris Dixon topped the Forbes list of the world's best venture capitalists.

Before joining a16z, Chris Dixon was a successful entrepreneur and investor. He founded the internet security company SiteAdvisor and the technology recommendation company Hunch, and also established the venture fund Founder Collective, making several personal angel investments.

With the booming development of the encryption industry, Chris Dixon has become a key figure at a16z, equally important as the company's founders Marc Andreessen and Ben Horowitz.

According to public information, a16z currently has 546 employees, of which 99 (18%) focus on encryption, showing the company's high emphasis on this field. Among these 99 people, 15 are responsible for investments, while about 80% of the remaining personnel mainly engage in post-investment services such as marketing, recruitment, legal, and technical work.

3. Investment Characteristics

a16z not only invested in many well-known internet companies during the Web2 era, but also placed bets on numerous high-value enterprises in the Web3 field. Here are some key investment characteristics of a16z crypto:

1. Adhere to "all-weather" investing: Regardless of market conditions, a16z crypto maintains continuous investment. Its first two funds were launched during the crypto bear market from 2018 to 2020, with total assets under management exceeding $800 million. Even in the current crypto winter, a16z has made over 30 investments in the past year, 11 of which were leading investments.

2. High lead and follow-on investment ratio: a16z crypto ranks first in the cumulative lead investor list, with a historical total of 109 lead rounds. For projects they are optimistic about, a16z crypto often conducts multiple follow-on investments.

3. Wide range of investments: Since its establishment, a16z crypto has invested in hundreds of encryption projects, covering various fields of the encryption industry.

4. Good at media promotion and project packaging: a16z promotes marketing through self-built media channels, and each investment partner needs to establish their own media to share investment concepts. At the same time, a16z also provides comprehensive support in marketing, legal matters, etc., for the projects they invest in.

4. Future Outlook

"Software is eating the world" is a well-known slogan of a16z, reflecting the company's firm belief in technological innovation. From "software golden hand" to "encryption golden hand," a16z's transformation aligns with the trends of the times.

As described by a16z crypto, there are three eras of the internet: the first era (1990-2005) before a16z was established, the second era (2005-2020) which saw the achievements of a16z. In the current third era that is being opened, a16z is striving to continue its brilliance and contribute to the development of the encryption industry.