Venture capital firm Andreessen Horowitz, one of the first to enter the crypto and blockchain market, had a snowstorm this crypto winter.
The Wall Street Journal reported Wednesday that the firm’s flagship cryptocurrency fund tumbled 40% in the first half of the year, according to people familiar with the matter.
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The first $300 million crypto fund Andreessen Horowitz raised in 2018 was on its way to a 10x return, The Information previously reported. One investment from this fund includes Coinbase, which went public last year. Coinbase shares are down 77% since their debut.
The steep drop in value comes as the crypto faces several headwinds. Crypto prices have dropped from their November high and Bitcoin has since lost more than 60%. This decline was driven by economic concerns ranging from rising inflation and rising interest rates to a shaky public market.
The private market has also faced its own turmoil. After a record-breaking 2021, venture capitalists and growth investors have pulled back significantly as they try to rebalance their portfolios and code their current investments in tough economic times.
Even Andreessen Horowitz, who heralded crypto at every turn, has slowed the pace of investment in crypto and blockchain in recent quarters, according to Crunchbase data. After making 53 deals in these sectors from Q4 of 2021 to Q2 of this year, the firm made just nine deals in the recently concluded third quarter.
But just this month, the firm spearheaded a $40 million Series B at San Francisco-based Golden, a startup that created a decentralized protocol for education. Last month, the firm spearheaded a $51.5 million Series B for Miami-based crypto-fraud software developer Sardine.
Despite the decline, the marriage of Andreessen Horowitz and crypto is unlikely to break up anytime soon. In May, Andreessen Horowitz said he had raised $4.5 billion for his fourth cryptocurrency fund.
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