Introduction to a16z

Marc Andreessen and Ben Horowitz, the founders of a16z (Andreessen Horowitz), are legendary figures in Silicon Valley. In the 1990s, the two co-founded Mosaic Communications. Although the company lost to Microsoft in the competition and was eventually acquired by AOL, its developed technologies, such as JAVA, SSL, and Cookies, became the cornerstones of the modern internet. Later, in 1999, they co-founded Loudcloud, one of the pioneers in cloud services. Despite setbacks during the 2000 dot-com bubble, Loudcloud successfully transformed into the software company Opsware, which was acquired by HP in 2007 for $1.6 billion.

In 2009, Andreessen and Horowitz established a16z, rapidly becoming one of the world’s leading venture capital firms. Over the years, a16z has backed tech powerhouses like Skype, Groupon, Airbnb, GitHub, Stripe, Facebook, Twitter, and Instagram, solidifying its reputation as an industry leader.

In 2013, a16z launched its dedicated Web3 investment arm, a16z Crypto, focusing on projects spanning all stages of development in the Web3 space. By January 15, 2025, a16z Crypto had amassed over $7.6 billion in assets under management.

Investment Characteristics

1. Investment Scale and Return on Investment (ROI)

As of January 15, 2025, a16z has invested in 169 projects, according to the latest data from CryptoRank and Rootdata. The firm prefers large-scale investments, with approximately 90% exceeding $3 million.

The company primarily focuses on early-stage funding, including seed rounds, Series A, pre-seed, and strategic rounds, accounting for 90% of its investments. a16z not only provides funding during the initial stages but also continues to support companies throughout their growth, helping them scale further.

With its precise investment strategy, a16z boasts an impressive Retail ROI of 60,704%, meaning that for every $1 invested, it returns $607, showcasing its exceptional vision and returns in the cryptocurrency and blockchain sectors.

Source: cryptorank

2. Focus on Infrastructure and Ecosystem Development

a16z places significant emphasis on building blockchain infrastructure, such as public chains, wallets, and trading platforms. Infrastructure projects account for 58% of its total investments in the cryptocurrency space. Through these investments, a16z contributes to developing a more mature industry ecosystem.

For example, Mysten Labs, which focuses on blockchain scalability and performance, was supported by a16z in its early stages. The project’s founding team comprises Meta’s (Facebook) cryptocurrency R&D department members.

Source: rootdata

3. Strong Founding Teams

a16z values the background and capabilities of founding teams, favoring entrepreneurs from major tech companies. Many of its portfolio companies have founders with experience in leading global technology firms like Meta, Microsoft, Google, and Twitch, enhancing their innovation and execution.

For instance, Irreverent Labs was founded by Rahul Sood, a former Microsoft executive, while Kosen Labs’ team members come from Google DeepMind.

4. Support for Industry Leaders

a16z has made multiple investments in leading industry players. For example, it led Coinbase’s Series B funding in 2013 and participated in subsequent rounds in 2015 and 2018. According to Coinbase’s regulatory filings, a16z purchased $57.1 million worth of Coinbase shares at $23 per share in October 2019 and later acquired an additional $30 million at $28.83 per share.

Other industry leaders, such as Aave, OpenSea, Yuga Labs, and Uniswap, have also received repeated investments from a16z.

Source: rootdata

5. Peak Investment Period

The firm was particularly active during 2021-2023, a period of explosive growth for Web3 and decentralized applications, targeting both groundbreaking innovations and critical development areas.

In general, a16z’s investment strategy focuses on early-stage investments, high-quality teams, infrastructure development, and supporting industry leaders, aiming for superior returns.

Source: cryptorank

6. U.S.-Centered Investments (93.5%)

a16z’s investment strategy is predominantly U.S.-focused, with 93.5% of its cryptocurrency investments in the country. The U.S. provides an ideal environment for blockchain and cryptocurrency projects, with a mature capital market, innovative tech ecosystem, and well-developed legal framework. For instance, a16z has invested in leading U.S.-based projects like Coinbase, OpenSea, and Uniswap.

Source: cryptorank

7. Collaborative Investments

a16z collaborates with many top investment firms to expand its network.

According to CryptoRank, Coinbase Ventures has co-invested in 30 projects, Union Square Ventures in 24, Polychain Capital in 22, Variant in 20, and Paradigm in 16.

These strategic partnerships enhance a16z’s influence in the blockchain and cryptocurrency sectors and strengthen its industry positioning.

Source: cryptorank

8. Top Holdings: UNI

According to Rootdata, as of January 15, 2025, a16z’s largest holding is UNI, with approximately 44 million tokens valued at $575 million. COMP is its second-largest holding, with 255,000 tokens worth approximately $19.82 million.

Source: rootdata

Popular Projects in the a16z Ecosystem

Link to Edit Table: docs.google

Recent Investments

a16z has been ramping up its focus on blockchain infrastructure and ecosystem development, particularly high-quality GameFi projects. Here are five companies that have recently received a16z’s support:

1. Azra Games

On October 15, 2024, a16z joined a $42.7 million funding round for Azra Games, a studio specializing in role-playing games (RPGs).

The studio is working on “Project Legends,” an ambitious RPG integrating NFT and blockchain technology. Aiming to redefine RPGs for the fourth generation, Azra Games plans to launch the game first on mobile platforms.

Source: azragames

2. AminoChain

On September 26, 2024, a16z led a $5 million funding round for AminoChain ,developing a Layer 2 blockchain protocol to connect enterprise healthcare institutions, enabling the creation of user-owned decentralized healthcare applications.

The first application built on AminoChain is a biobank marketplace that allows researchers to query and license samples across a network of biobanks. Patients can track the usage of their samples, learn from insights generated from their samples, and earn money when their samples are sold.

Source: aminochain.io

3. Arcjet

On September 10, 2024, a16z led a $3.6 million funding round for Arcjet, a security tool designed for developers to easily implement application security with minimal code changes.

Arcjet offers multiple features, including rate limiting, bot detection, email verification, and defense against common attacks. Its SDK includes essential security components and ready-to-use solutions, enabling developers to integrate security protections into their applications without altering existing architectures.

With high performance and low latency, as well as support for on-premises or cloud-based analytics and automated security rules, Arcjet provides seamless protection for applications, effectively countering threats from abuse and suspicious activities.

Source: arcjet

4. Moku

On September 9, 2024, a16z led a $5.35 million funding round for Moku, a Web3 gaming platform that connects players with gaming guilds, NFT minting pages, and game strategy communities.

It facilitates deeper engagement with the Web3 gaming ecosystem by providing tools and resources for players to interact with various aspects of decentralized gaming.

Source: x

5. Balance

On September 4, 2024, a16z led a $30 million funding round for Balance, a Web3 platform combining gaming, blockchain, and AI technologies.

Balance provides tools for developers and players, including an AI-driven ecosystem, NFT marketplace, and game launchpad, and features governance through EPT tokens. The platform supports seamless integration between Web2 and Web3, with cross-chain operations and dynamic protocol adaptation to enhance performance.

Additionally, Balance promotes global user participation and the development of virtual markets through its decentralized AI network, Balance ID system, and stablecoin functionality.

Source: balance.fun

For more details:

Source: cryptorank.io

a16z CSX Startup Accelerator

The Crypto Startup Accelerator (CSX) by a16z is a 10-week program designed to fast-track the growth of blockchain startups. Participants receive funding, expert mentorship, and access to extensive resources to help them build innovative products across industries. They also gain opportunities to connect with top Web3 teams and industry experts for guidance and support.

In the fall of 2024, the CSX program launched in New York City, selecting 21 startups from 11 countries. These companies span fields such as artificial intelligence, decentralized finance, infrastructure, and consumer applications. Additionally, a16z hosted the CSX program in London in 2024, further extending its support to global blockchain startups.

The spring 2025 CSX program is scheduled to take place in San Francisco from April 1 to June 3. The application deadline is February 7, 2025, at 6:00 PM PST. As of January 15, 2025, there are 23 days remaining to apply.

Source: a16zcrypto.com

Application Link: apply.a16zcrypto.com

a16z’s Future Investment Focus

Based on a16z’s article “7 Big Ideas for 2025 (and more trends to watch),” here are the major investment directions the firm will focus on in 2025.

Full Article: a16zcrypto.com

1. The Rise of Stablecoin Payments

As the advantages of stablecoins in global payments, disintermediation, and cost reduction become more apparent, a16z may increase its investments in stablecoin payment solutions.

Small and medium-sized enterprises (e.g., restaurants, coffee shops) may lead the adoption of stablecoin payments, creating new investment opportunities for innovation and adoption of cryptocurrency payment technologies.

2. Integration of Blockchain and Traditional Finance

a16z may focus on innovative solutions combining blockchain and traditional finance, such as bringing government bonds on-chain.

Introducing government-backed digital assets (e.g., digital bonds) to blockchain could provide more stable collateral for decentralized finance (DeFi) and promote blockchain’s application in traditional financial markets. a16z may also invest in related infrastructure and platforms to facilitate this integration and improve bond transaction transparency and efficiency.

3. Decentralized Governance and Legal Framework Innovation

DUNA (Decentralized Unincorporated Nonprofit Association) offers a legal governance framework for crypto projects and could become a critical legal foundation for future blockchain initiatives.

a16z may invest in projects that enhance the legal status of DAOs using this decentralized governance structure, driving widespread adoption of decentralized governance.

4. Reusable Infrastructure and Development Tools

With developers increasingly inclined to reuse existing infrastructure, a16z may focus on projects that provide efficient, reusable blockchain infrastructure components. These investments will help accelerate development cycles, lower costs, and foster sustainable Web3 ecosystem growth.

5. Decentralized App Stores and Content Discovery Platforms

As centralized platforms increasingly block crypto apps, decentralized app stores and marketplaces will likely become a16z’s investment priority.

For solutions that support decentralized app publishing, Web3 development tools, and censorship-free content publishing, a16z is likely to increase its investment in this area, driving the rise of decentralized platforms.

For example, Worldcoin’s World App marketplace stores identity information and provides access to “mini-programs.” Similarly, Solana smartphone users enjoy a free, decentralized application store (dApp Store).

6. Transforming Crypto Asset Holders into Active Users

With the continuous growth of crypto users, a16z is likely to invest in projects that facilitate the transition of users from “asset holders” to “active participants.” This includes optimizing transaction experiences, reducing usage costs, and increasing the adoption of blockchain technology, particularly in areas such as stablecoins, DeFi, NFTs, and DAOs.

a16z is expected to invest in projects that enhance user experience, encouraging more crypto asset holders (currently over 617 million people) to engage with on-chain applications.

7. Simplifying Blockchain Technology and User Experience

As blockchain technology becomes increasingly “invisible” and user experiences are simplified, a16z will likely focus on investing in companies that provide intuitive and user-friendly blockchain applications, especially those that allow ordinary users to benefit from blockchain without needing to understand the underlying technology deeply.

Conclusion

Founded in 2009 by Marc Andreessen and Ben Horowitz, a16z initially focused on early-stage investments in the internet sector. In 2013, the firm launched a16z Crypto, a Web3-focused investment fund that has achieved remarkable success. As of January 15, 2025, a16z has invested in 169 projects, delivering a 607x return on investment.

a16z emphasizes infrastructure development and early-stage investments, placing importance on the backgrounds of founding teams, innovative business models, and ecosystem building. It has become one of the world’s leading venture capital firms.

Looking ahead, a16z will continue to invest in key areas of the crypto industry, including the adoption of stablecoin payments, the integration of blockchain with traditional finance, decentralized governance and legal framework innovation, reusable infrastructure, and development tools, decentralized app stores and content discovery platforms, and projects transforming crypto asset holders into active users.

Additionally, a16z will focus on simplifying blockchain technology and user experience, investing in companies that offer intuitive, user-friendly blockchain applications, driving the adoption and development of crypto technology.