Andreessen Horowitz Raises $2.75 Billion for Two New Funds

(Bloomberg) -- Andreessen Horowitz, a firm that in just a decade become one of the powerhouses of venture capital, said on Wednesday it had raised another $2.75 billion.

The bulk of the cash, $2 billion, will go toward a new late-stage fund, led by general partner David George. He joined Andreessen Horowitz earlier this year from venture firm General Atlantic. 

The fund is aimed at companies “that are just hitting their escape velocity,” wrote managing partner Scott Kupor in a blog post. In the past, that might have meant an initial public offering. Today, because of the increasing activity of deep-pocketed backers, those startups can stay private longer. Investors using this big-check approach range from mutual funds like Fidelity Investments, to fellow venture firms like Sequoia Capital, to hybrids like Japanese conglomerate SoftBank Group Corp.’s Vision Fund.

The new fund comes as Andreessen Horowitz racks up a win from the recent IPO of Lyft Inc., a company it backed from 2013, and looks set for an even bigger return from Slack Technologies Inc., which it now owns about 13 percent of and has backed since its earliest days. Slack filed to list on the New York Stock Exchange last week.

Andreessen Horowitz, whose backers include large investors such as the University of Michigan endowment, also said it had raised $750 million for its sixth general fund. Three years ago, its fifth fund totaled $1.5 billion. At that time, the fund encompassed early-stage and larger late-stage investments. Now, those later-stage investments will be made from the dedicated late-stage fund. Andreessen Horowitz, which already has a comparably large staff for the venture world, expects to hire a full team for the fund with “deep expertise in the financial evaluation of businesses,” Kupor wrote.

This year, Andreessen Horowitz announced it was switching its legal status to that of a registered investment adviser, rather than a traditional VC fund, a move it said would give it more flexibility. The firm also runs separate health care technology and cryptocurrency funds. It was founded in 2009 by Marc Andreessen and Ben Horowitz.

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