Powerhouse venture capital firm Andreesen Horowitz (a16z) is reportedly weeks away from closing a close to $7 billion raise for new funds.
The Menlo Park firm is expected to finalize the raise for a larger feeder fund come April from anywhere between $6.5 billion to $7 billion. According to Axios, which first reported the news, the firm is targeting $6.9 billion to be split between various funds; however, there is no hard cap to raise.
Andreesen Horowitz has asked its limited partners to commit capital to grow the master fund, which includes a growth stage, gaming and three early-stage funds. Limited partnerships (LPs) are also being asked to signal their interest in individual funds and allocate dollars proportionately across their offerings.
If the firm hits its mark, half of the funds will go toward its fourth growth fund.
Close to 15% of capital will be allocated to a16z’s "American dynamism" fund, which will specifically invest in defense and manufacturing technology companies. And 10% will go toward the firm’s second gaming fund.
The rest will be split across other early-stage funds that will focus on enterprise infrastructure and application technologies. According to Reuters, LPs were told that all early-stage funds would hyperfocus on artificial intelligence across those sectors.
Andreessen Horowitz did not immediately respond to the Silicon Valley Business Journal’s request for comment.
Overall venture funding is down, hitting an all-time low of $248.4 billion in 2023, slipping below $250 billion from 2017, according to CB Insights. From 2022 to last year, venture fundraising plunged 42% from $426.2 billion globally.
In the U.S., venture capitalists saw a similar trend. Stateside, VCs raised $67 billion in 2023, a sharp decline from the $173 billion raised in 2022, an annual low since 2017, according to PitchBook data.
Venture deals also faced a similar headwind with global deals in 2023 marking a six-year low, CB Insights reported. Last year deals fell 30% year after year, reaching just over 29,300 deals. However, the report added that the majority of top deals last year went towards artificial intelligence and sustainability technology companies.
And with firms looking to get a slice of the AI pie, Andreessen Horowitz is placing many bets in that sector.
In 2023, Andreesen Horowitz had its hand in 112 deals, with the majority of its largest investments in AI-related companies, according to Crunchbase data.
The most notable being its investment in Open AI’s $300 million raise in April and Databricks Inc.’s $500 Series I raise in September.
The firm also got in on KoBold Metals Company’s $195 million round in June and Genesis Therapeutic's $200 million Series B round announced in August.
The last time a16z announced it collected a ginormous feeder fund was in early 2022 when a $9 billion raise was made public. At the time, those funds were distributed across three smaller funds to invest in biotech and growth-stage companies.
