Andreessen Horowitz, more popularly known by ‘a16z’, has announced, what would unarguably be one of the largest fundraises by a startup-focused PE/VC firm. The firm has announced a massive USD 9 Billion fundraise through a set of existing and new limited partners, that it would deploy through its Venture, Growth, and Bio Funds.
The fundraise, though not surprising, is perhaps a validation of how global wealth management has increasingly started to look at startup and future-tech businesses as a much leaner, faster engine of wealth creation. Take for example a16z’s crypto funds. The firm started with a $300Mn debut crypto fund, $515 million second crypto fund and a third one, that crossed the $1Bn mark recently, by a large margin.
Talking about the reasoning behind such a massive reload of capital to focus on newer sectors, founder Ben Horowitz says, “At Andreessen Horowitz, we specifically believe in the technology-enabled future. There are no more worthwhile endeavors than our most brilliant minds taking great risks to improve the world by doing something larger than themselves.”
a16z has not shied away in investing in deals that interest its core sectors, no matter the deal size. With these new funds, including a $1.5B Bio fund, $5B Growth fund, and $2.5B Venture fund, coupled with the $2.2B Crypto Fund and $400M Seed Fund that the firm raised in 2021, Andreessen Horowitz has written checks as small as $25,000 and up to hundreds of millions of dollars. And the firm says it would continue do so.
Larger funds have kind of started gaining traction, thus also resulting in much larger and unheard-of style fundraising within startups. That also comes with an added pressure to get more deals and subsequently larger exits. In terms of fundsize, remember how Norwest closed a $2Bn in 2019 alone, with publicly available data stating a quarter of the firm’s total fundraise happening within last 2-3 years.