In March, we told you that Andreessen Horowitz was targeting $1.5 billion for its fifth and newest fund. On Friday, the seven-year-old Sand Hill Road firm confirmed that it has closed on that amount, having secured the capital commitments from its previous investors.
The announcement comes a little more than two years after the firm closed its fourth, multi-stage venture capital fund with $1.5 billion.
The money also comes on the heels of a $200 million fund that the firm announced last November called the AH Bio Fund, a vehicle that’s being used to invest in mostly early-stage startups at the intersection of computer science and life sciences. (We wrote about its newest bet, Freenome, last week.)
Altogether, Andreessen Horowitz has now raised a somewhat stunning $6.2 billion. Managing partner Scott Kupor shared more about the fundraise and what’s changing (and not changing) in a chat Friday morning. Our conversation has been edited slightly for length and clarity.
How would you describe this fundraise?
It was a great raise. It took a relatively short period of time; we were oversubscribed. It’s consistent with our last funds in terms of size, based on the opportunity set we see in VR and artificial intelligence and core enterprise infrastructure, among other things.
Any changes to your mandate?
No, we’ll still do multistage investing in software companies, with about 70 percent of our bets going into early-stage stuff and the rest going into later-stage stuff.
What about seed-stage investing? Marc Andreessen had suggested a few years ago that the firm might dial back on this except for “fringe” technologies or products.
We’re still doing seed investing. Earlier on, we did a lot of small seed investments where we’d put in $50,000, but we realized that a better approach for us would be to take bigger positions and do fewer of them . . . so a lot of our deals today range from $500,000 to $1.5 million where we’re not just part of a party round but a major investor and those companies become part of the full Andreessen Horowitz family, meaning they can [take advantage] of our [internal] service and networking groups.
You’d also kind of backed off of late-stage deals, the idea being that newer investors could mark up your deals. Has that changed or will it as those non-traditional investors back away?
Yes, if there are greater opportunities or later-stage becomes more attractive. I’m not smart enough to know how to forecast it.
There has been some turnover at the firm. How many GPs do you have currently, and will that change with this new fund?