Andreessen Horowitz is adding a new, high-profile partner to help deploy its $2.2 billion cryptocurrency fund.
Thirty-year-old Arianna Simpson is being promoted to general partner from deal partner roughly a year after joining, the company announced Monday.
Simpson has become somewhat of a celebrity in the cryptocurrency world. She left a global marketing job at Facebook and joined BitGo in her early 20s. Then she launched her own venture capital firm at age 24 to invest in blockchain and crypto companies. Friends and mentors advised her not to.
“It was an unpopular decision,” Simpson told CNBC in an interview. “But the opportunity cost of not going into this industry was just too high.”
Simpson said she was “blown away” after reading bitcoin’s white paper and thought it was “the most important innovation” of her lifetime. She continued researching cryptocurrencies and tried to convince Facebook to launch a crypto project before its foray into the space with Libra, now called Diem. It was “four to five years too early,” she said.
Simpson invested early in a bear market. Bitcoin’s value dropped by as much as 80% in early 2018 and most smaller cryptocurrencies followed suit. Her firm, Autonomous Partners, backed companies such as Celo during those years, overlapping with some of Andreessen’s early crypto plays.
Navigating bear markets
Andreessen Horowitz entered the crypto space through its 2013 investment in Coinbase. It began raising dedicated funds for crypto three years ago, during the bear market now known as the “crypto winter.” The firm, founded by Marc Andreessen and Ben Horowitz, announced its third such fund in June. The latest $2.2 billion fund is more than seven times larger than the first.
Simpson joins partners Katie Haun and Chris Dixon, who have been running the firm’s crypto efforts and met on the board of Coinbase. Haun, a former Justice Department prosecutor, investigated the now-defunct cryptocurrency exchange Mt.Gox and the internet black market Silk Road. Haun and Dixon have compared blockchain’s potential to the internet and remain “radically optimistic.”
Simpson first connected with Haun through a direct message on Twitter.
“From the first moment I met Arianna several years ago I knew that she was a force to be reckoned with,” Haun said. “Her drive for crypto and for connecting people and ideas was immediately clear during a coffee that turned into several hours of conversation.”
The firm has stakes in companies powering the recent NFT boom, like OpeanSea and Dapper Labs. Simpson highlighted the company’s focus on “decentralized finance.” Known as “defi,” the term is used to describe traditional finance applications built on the same technology that underlies bitcoin. She also pointed to investments in less-obvious crypto-related categories such as gaming.
While categories like NFTs and defi have taken off this year, the price of bitcoin has dropped in half from its all-time high above $60,000 in April. Simpson said prices can be a “lagging indicator — not a leading one,” for private investments.
“You have to really separate the short-term prices from what is fundamentally being built — we just kind of ignore the headlines and just focus on the technologies,” she said. “Bear markets are often where the real work happens.”
