Andreessen Horowitz plans to invest $500 million in Indian startups

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Andreessen Horowitz, who first invested in India last year, is looking to become aggressive in the world’s second largest internet market.

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The Silicon Valley venture capital firm has committed about $500 million to support Indian startups, a source familiar with the matter told TechCrunch.

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A firm that led a funding round on a Bangalore-based cryptocurrency exchange. CoinSwitch Kuber last yearis also looking for candidates for several investment positions in the country, people familiar with the matter say.

A number of the firm’s partners, including Seema Emble and Sumit Singh, have engaged with several Indian startups in recent months, people familiar with the matter said, asking to remain anonymous as it is a private matter.

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The firm, which said in January that raised $9 billion for its venture capital, growth and biofunds — is exploring the possibility of investing in an Indian startup that operates an opinion-sharing platform worth about $250 million, one person said. He also partnered with an early-stage fintech company headquartered in Bangalore, according to another source.

If the firm, colloquially called a16z, follows through with the plan, it will be the last major investor active in India. On Friday, he did not respond to a request for comment.

The firm has been exploring markets such as India for many years. In a keynote at the Stanford Graduate School of Business five years ago, a16z co-founder and general partner Marc Andreessen (pictured above) said it was “extremely tempting” to support startups in emerging markets. But it was also difficult for a venture capital fund to reach more countries, he explained. Venture capital is “a very hands-on process of understanding the people you work with, both to value the company and to work with the company.”

“If this is still going to be a practical business, then there will be the issue of geographical distance: if I am not in a different geography, do I really know these people to make decisions. So, a bunch of firms are trying to hire local teams. But there is also a fundamental problem: if the local team is really good, they can easily leave and run their own firms. If they’re bad, they keep working for me… that has its problems.”

Dozens of firms, including Bessemer Venture Partners, General Catalyst, Insight Partners, Dragoneer, D1 and Bodhi Tree, have stepped up their investment in the world’s second most populous country in recent years.

Some of their peers/competitors, including Sequoia, Lightspeed and Accel, all of whom have been active in India for over a decade, have either raised new country-specific funds in recent months or are in the process of raising new funds. Lightspeed India Venture Partners is looking for raise over $500 million for its fourth fund in IndiaThis was reported by TechCrunch last week.

SoftBank, Alpha Wave Global and Tiger Global have also notably doubled rates in India in recent quarters. Only SoftBank last year invested over $3 billion in Indian startups and plans to invest up to $10 billion this year, the report said. Over the past 18 months, Tiger Global has helped mint about two dozen unicorns in India.

On the web3 front, a slew of investors, including Coinbase Ventures, Sino Global, Hashed, and FTX Ventures, have been engaging with several startups in the country in recent weeks, according to people familiar with the matter.

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