Andreessen Horowitz is renaming a16z crypto as a16z Frontier and widening its newest fund beyond crypto startups to what it calls frontier startups, companies “building new technologies and creating markets that may take years to develop”, Chris Dixon said in a post on Thursday. He framed it as an expansion: “we will continue to invest in crypto and related ventures and advocate for sensible crypto regulation.”
The new name arrives in a leaner year. The crypto team raised $2.2 billion for its fifth fund in May, less than half the record $4.5 billion it raised in 2022, The Information reported, according to Unchained. Dixon’s post gives no size for the renamed fund, so the May figure is the latest on record, Decrypt noted.
The business model does not change: a venture fund raises money from limited partners and earns its returns from a few early-stage bets that grow very large. What changes is the hunting ground.
Dixon lists brand-new uses of AI, autonomous machines, biology and medicine, and networks in which software agents transact with each other. Blockchains stay in the pitch as the payment rails for those networks. “Crypto can give new networks native economic capabilities, enable machine-to-machine transactions, and create new ways to bootstrap them,” he wrote.
Dixon will run the fund with founders Marc Andreessen and Ben Horowitz and general partners Eddy Lazzarin and Guy Wuollet, and the operating teams for regulatory work, hiring and research stay in place. Ali Yahya, who joined the crypto team in 2017 as its first full-time member and became a general partner in 2021, has told some investors he is leaving to work on his own startup, The Information reported. He is not named in Dixon’s post.
The drift was already visible in the portfolio. The crypto team had backed non-blockchain companies such as prediction market Kalshi and AI compute marketplace Ornn, according to The Information. Paradigm took a similar turn in July, when its $1.2 billion fourth fund expanded into AI and robotics, and Framework Ventures and Haun Ventures have also widened their mandates, the same report said.
Not everyone reads it as a simple expansion. CoinDesk called the rename “another sign of the bear market times” in its live coverage on Thursday, and Dixon made a similar case for looking past prices in 2022, when crypto’s market value had fallen by about two-thirds from its peak, Decrypt recalled.
For now, the clearest number is the one in the past: $2.2 billion this year, against $4.5 billion four years ago.
Elsewhere in crypto deal-making this week, the bank side was busier, as with Standard Chartered’s Zodia Custody deal.
Get the week’s raises and deals in The Ledger Weekly.
This article is for information only and is not investment advice.