Andreessen Horowitz Is Raising More Money Than Ever And Here's Why | Exploring Markets

Andreessen Horowitz Is Raising More Money Than Ever And Here's Why

Andreessen Horowitz is one of the largest venture capitalists firms in the world. They are also one of the most outspoken. One of their founders, Ben Horowitz, writes his blog posts that lead off with lyrics from rappers. The other founder, Marc Andreessen, thinks Warren Buffett is insanely wrong about Bitcoin.

That's why it is notable to know that they just recently raised over $1.5 billion to invest in technology and new start-ups. In-fact, over the last 2 years they've raised a little over $3 billion for two separate investment funds. We just read their note to clients about their new billion dollar fund and why it's important now. Here are the key segments:
  1. "We've gone from an internet population of 55 million users to nearly 3 billion, and smartphone users are expected to grow from 1.5 billion today to 5 billion in the coming years."
  2. "As these [Internet/Technology] markets have grown, the technology costs required to support them have fallen dramatically due to developer productivity tools and cloud-based computing. For enterprise in particular, the advent of SaaS and BYOD has expanded the market opportunity."
  3. "Entire new enterprise application markets have been created simply as a result of the proliferation of mobile devices and cloud-based computing." 
  4. "Another important growth trend is industries that previously were not candidates for venture-financed new company formation. These industries are increasingly being impacted as software eats the world, and that’s creating opportunities for expanding the venture capital category. We've already seen a number of traditional industries being eaten by software: television (Netflix), music (iTunes, Spotify, Pandora), retail (Amazon), movies (Disney’s Pixar); there will be many more in the coming years." 
  5. "Large, vertical markets — such as healthcare, education, financial services, energy, and even government services — are ripe for technological innovation." 
  6. "Perhaps most importantly, we are seeing many new companies build “full stack” startups. Instead of just owning part of the stack — for example, licensing their technology for another company to embed in its end-user product — more companies today are integrating the service, end-to-end and at scale." 
  7. "Finally, on top of all of these great demand drivers, the supply side of the venture capital business has changed for the better. Limited partner annual investments into venture capital have averaged around $16-18 billion over the last few years, down precipitously from the $110 billion peak in 2000. At the same time, the number of VC firms has been declining, so the total dollars raised is shared among a smaller number of firms."

    - Read the full note from Scott Kupor about the $1.5 billion round right here