Andreessen Horowitz backs NFT investor group behind rare Wu-Tang Clan album purchase

The crypto collective that bought Wu-Tang Clan’s “Once Upon a Time in Shaolin” album and an NFT of the original Doge image has a new member: venture capital firm Andreessen Horowitz.

The firm tells TechCrunch it has made an investment in PleasrDAO, a blockchain-aligned group of a few dozen crypto investors that have been teaming up to buy high-priced NFTs in recent months. The group’s purchases include the famous Doge image, which they bought for $4 million (1,696.9 ETH to be exact) then later fractionalized and sold to the crypto community (its current implied market cap is just above $100 million). The DAO also paid some $5.4 million for a work from Edward Snowden and $4 million for the Wu-Tang Clan album.

A DAO (or decentralized autonomous organization) is basically a group organized formally around blockchain voting mechanisms to make decisions and invest capital.

A16z Crypto’s investment in PleasrDAO is not their first publicly announced bet on the organization type. In October, the firm made an investment in Friends With Benefits (FWB) DAO, which they valued at $100 million. Andreessen Horowitz did not disclose the size of their investment in PleasrDAO though council member Santiago Santos specified their overall stake of the DAO’s governance tokens was “less than 5%.”

Like many other crypto groups, PleasrDAO had a very singular ambition when it was formed — to bid on a work by a digital artist, in this case one by pplpleasr. Said work was an animated video advertisement for the decentralized exchange platform Uniswap. The group formed in March after crypto founder Leighton Cusack tweeted a link to the auction and asked, “Anyone want to create a quick DAO to bid on this???” The group eventually won the bid at 310 Eth (some $525,000 at the time) with all proceeds for the purchase going to charity.

“Very quickly on, we thought, a lot of the smartest minds in DeFi are here — there is an opportunity to really take this in an interesting direction,” Santos tells TechCrunch. “I think, over time, the DAO grew to the point where we felt that we needed some more structure and hierarchy.”

The group has since continued making investments and bulking up its portfolio while aiming to discover new artists that it can support. Santos says he has aims for the group to become a “Medici house” of NFTs “where a lot of digitally native artists can come and get initiated and discovered.”

“DAOs are almost the purest manifestation of what web3 and crypto are all about,” a16z GP Ali Yahya tells TechCrunch.

While a16z was early to crypto, the rise of so-called “crypto native” investment funds operating closer to founder and developer networks in the space has made it necessary for legacy firms like a16z to get bolder in backing new groups like DAOs. Andreessen Horowitz sees plenty of areas where they can help PleasrDAO including policy and regulatory concerns — an area where DAOs currently seem to be operating in a gray area of as unregulated investment funds of pooled capital.

A16z’s bet on the group is, in many ways, a leveraged bet on NFTs, which the group has already bet heavily on. This year, the firm backed NFT marketplace OpenSea, NFT gaming giant Sky Mavis and NFT music platform Royal, among others. The firm also anchored Meta4 — a $100 million venture fund dedicated to buying up pricey NFTs. These investments are being made from the firm’s massive $2.2 billion crypto-centric fund, which the firm debuted this summer.

“It’s easy to underestimate the potential of NFTs,” Yahya says. “It very well could be that NFTs will be enormous and that the total market cap of all NFTs down the line will actually be bigger than the market cap for fungible tokens.”