This morning private-market powerhouse Andreessen Horowitz announced That it has closed $9 billion in new capital for its venture capital, growth-stage and biotech-focused vehicles.
The company, better known by the nickname a16z, also raised $2.2 billion in crypto-focused funds last year.
The fundraising collection by the firm highlights the growing size of the private-market investment vehicles we group under the venture capital banner, and the growing capital base of a16z itself.
Looking back in time, the group’s last generation of funds — including its seventh venture fund of $1.3 billion, its second growth fund of $3.2 billion, and its third bio-focused fund of $750 million — were worth more than half of its latest total fundraise. So, it appears the a16z is not only reloading, it’s also raising more capital than ever for its usual focus crop.
It should come as no surprise that the group is raising a large investment capital pool. Its first crypto fund was worth $300 million, its second was $515 million, and its most recent was worth nearly four times that. As an investment group, a16z like many private market investors is putting more capital to work for a new crop of new funds.
The propensity for larger funds is generally considered a contributing factor to large startup funding rounds, and some pressure with respect to deal access (harder) and startup valuations (higher).
To underscore just how big venture and venture-ish funds are today, remember that Norwest Venture Partners closed a $3 billion fund last month. This has raised the group’s total capital “in decades” since our own Connie Loizos put it at $12.5 billion. Therefore, a substantial portion of the firm’s historical capital was raised in the previous quarter itself.
It is a capital arms race in private markets, as enthusiasm for both traditional (software, etc.) and frontier (crypto, quantum computing, metaverse, etc.) technology companies remains red-hot. The public markets have been behaving a little differently in recent weeks, which doesn’t seem to have slowed the venture capital firm side of the fundraising coin. Not now, at least.