New Funds, New Era...Tesla's Tough Week...a16z in the VC Directory
New Funds, New Era...Tesla's Tough Week...a16z in the VC Directory
Plus, VC fundraising is at its lowest in a decade, per PitchBook data
Andreessen Horowitz Raises Billions
For Andreessen Horowitz, it’s time to build, across every hot tech sector.
The team announced $7.2 billion in new capital raised on Tuesday. With Andreessen’s new fund structure, there are key sectional leaders underneath Marc Andreessen and Ben Horowitz—and some other once-rising stars have headed for the exits.
The capital is divided between multiple funds this time, each helmed by a general partner:
$3.75 billion for growth investing
$1.25 billion for infrastructure (which includes many of the firm’s AI investments)
$1 billion for “Apps” — made up of enterprise, consumer tech, and fintech
$600 million for games
$600 million for American Dynamism
Commitments to certain segments are more modest than they were previously. A16z’s last growth fund was capped at $5 billion, so this is definitely a step down from that. The firm also chose not to break out a separate seed fund this time around.
Overall the new funds closely map what’s “in” and what’s “out” in Silicon Valley, with big commitments to defense tech and AI. Since its founding in 2009, a16z has positioned itself as “a different kind of VC,” and now with its massive size and extensive set of services for founders, it may well be that. But its investment theses for these new funds fit right in line with the hype categories of our current moment, and with the sheer number of investments, a16z looks in some ways like an index fund for hype-y startups.
That might be all but inevitable as the firm scales up, but it certainly faces a long-term challenge in maintaining the fat returns expected from a top-tier VC off an ever-growing pile of capital.
This fundraise feels large given the funding drought, but is in line with some of the firm’s mega-fund peers. Lightspeed Venture Partners closed over $7 billion in fresh funds back in the summer of 2022, although most of its fundraise had happened before the downturn fully hit.
As for what’s “in,” it’s no surprise that AI is a key category within the new funds: general partner Martin Casado leads the infrastructure/AI segment, and now his team has a lot more capital to deploy. The firm made a big bet on Mistral in December, leading its $415 million round, and scooped up OpenAI secondary shares in a sale early last year.
Defense tech and gaming are big priorities too. David Ulevitch leads the American Dynamism practice, which hosted a DC summit earlier this year.
Andrew Chen, in turn, is in charge of games. Chen switched his focus from consumer to go all in on games in 2022.
On the growth side, David George, who oversaw the firm’s investment in Flexport, is leading the charge. Scott Kupor, the firm’s first employee, manages investor relations and growth initiatives on the internal operations side.
The “Apps” team, helmed by Alex Rampell, has lost some GPs in the past few months—Connie Chan, who had been leading the push to get into more China deals, left in late January. Some of Chan’s bets, such as the live shopping startup Whatnot, have since fizzled.
Kristina Shen, who racked up several early-stage enterprise deals for the firm such as her recent investment in YC alum Tennr, announced two weeks ago that she was leaving to raise her own fund.
Enterprise SaaS and fintech, also part of the apps group, are in a slow patch, with fintech recording its lowest funding totals in 6 years. SaaS investing jumped at the end of 2023 but is still down from its peak.
Notably absent from the new fund announcement are Bio + Healthcare and Crypto, though they are presumably still flush with cash after big raises a few years ago. A16z was a major crypto booster and Coinbase remains one of its biggest wins ever, but they also suffered some losses. A prized crypto investment — Uniswap — is facing potential trouble from the SEC.
As a16z continues to scale up, it may find that it has to cover more bases, as it is doing in politics: new filings showed the firm has written $250,000 checks to Democratic and Republican Super PACs this year. The bigger you are the more incentive there is to hedge your bets.
VC Directory
Andreessen Horowitz
In light of the new fundraise, we’ve decided to update our entry for Andreessen Horowitz in our VC directory.
Here’s a breakdown of who’s who at the firm, which was founded in 2009 by Marc Andreessen and Ben Horowitz. It’s come a long way since its initial $300 million fund, now boasting dozens of investors and hundreds of employees. The firm is stage agnostic, investing from seed to growth stage. Eric wrote a detailed “unauthorized history” of the firm a couple of years back that’s worth perusing for a more in-depth look at how the firm became the behemoth it is today.
Outside of his dealmaking prowess, Andreessen is known for his public prognosticating on Twitter and occasional essays, from his famed “software is eating the world” to a more recent declaration that it was “time to build.”
Big thanks to our intern Janya Sundar for helping compile this entry.