Andreessen Horowitz Closes In On Up To $7B In New Funds

Andreessen Horowitz, known for early bets on then-startups such as Facebook, Instagram and Airbnb, is reportedly “weeks away” from closing on as much as $7 billion in new funds.

A16z is targeting $6.9 billion for a “master feeder fund,” per the report in Axios. The firm expects a final close in early April on between $6.5 billion and $7 billion.

Per the report, half of the raise — as much as $3.5 billion — would go to the firm’s fourth growth fund. A16z announced its last growth fund in early 2022 at $5 billion, so the new growth fund would be significantly less.

The firm also is not raising dedicated early-stage or seed-stage funds, but instead splitting money by subsector. That will include 15% for an AI infrastructure fund and an AI apps fund, and also 10% for an “American dynamism” fund which would support national interests such as aerospace, defense, public safety, education, housing, supply chain, industrials and manufacturing.

There also will be a 10% allocation for a gaming fund.

The new venture market

It was just late last year when firm founder Marc Andreessen penned his “The Techno-Optimist Manifesto.” The 5,000-word “manifesto” basically says technology is the cure for — not the cause of — the world’s ills and comes complete with an enemy list and even a “meaning of life” entry.

Despite the optimism, a16z has actually seen its deal flow fall every quarter since Q1 2023, per Crunchbase data. However, it should stop that streak this quarter.

News of the new funds come as venture firms are still struggling with the downturn in the industry. Earlier in the week, The Information reported Boston-based OpenView Venture Partners plans to return 75% of a $571 million fund it raised a year ago to its limited partners. Late last year the firm decided to wind down.

There have been reports that other firms have had trouble raising new funds after struggling to give LPs significant returns after the salad days of 2021. Even some large, well-established firms had to change fundraising plans last year to adjust to the evolving market this year, as both San Francisco-based Founders Fund and New York-based Tiger Global announced cuts to their new funds.