Silicon Valley-based VC firm Andreessen Horowitz (A16Z) has closed its new $1.5 billion fund, as per a blog post on the company’s website.
Andreessen Horowitz Fund IV completed fundraising after being oversubscribed in January. Its size is the same as its predecessor. Announcing the fund closure Scott Kupor, partner and COO of the VC firm said the new fund is multi-stage VC fund.
Founded in July 2009 by Netscape Communications Corp co-founder Marc Andreessen, and Opsware Inc and LoudCloud Inc founder Ben Horowitz, the firm considers investments in areas such as consumer internet, mobile software and services, software-powered consumer electronics and networking, among others.
It does not have direct operations nor has invested in any pure Indian firms yet but has seed funded cross-border ventures such as voice and messaging apps platform Plivo, which was previously part of local accelerator Morpheus. It has also invested in Fab.com, which also counts Times Internet as an investor.
Recently Counsyl co-founder Balaji Srinivasan joined the firm as general partner. Apart from Srinivasan, other Indian-origin partners at the firm include Ramu Arunachalam, Ashvin Bachireddy and Zal Bilimoria.
Globally, Andreessen Horowitz has made several investments over the past two years. Its portfolio companies include Zynga, Foursquare, Airbnb, Kno, Groupon, Airtime, Box.net, Pinterest, Asana, Lytro, BOKU, and Jawbone among others.
In October 2013, it exited its investment from digital non-fiction book publisher Open Air Publishing.
“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. These entrepreneurs care enough about all aspects of their product/service that they want (or need) to innovate in all the areas that touch it. These companies aren’t just controlling a better end-user experience for their customers — they’re potentially bypassing legacy constraints altogether,” Kupor said in the blog.
As per the blog, LPs’ 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 during the dot com boom.
“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. While such transitions can indeed be painful, this is a positive sign of a professionalising market — one in which the supply and the demand are in closer equilibrium,” said Kupor.
He added that if his prognosis that software is in fact eating the world is correct, the supply side will grow to meet this demand-side opportunity.
“In the meantime, however, a more rational balance between the supply of capital and the available means by which to deploy that capital is a sign of a healthy ecosystem and bodes well for venture capital returns,” Kupor said.
(Edited by Joby Puthuparampil Johnson)