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Andreessen Horowitz has raised $7.2 billion to invest in technology startups, including those at the forefront of the generative artificial intelligence revolution, in one of the largest fundraising efforts by a venture capital firm in years.
The Silicon Valley-based group, led by veteran tech investors Marc Andreessen and Ben Horowitz, announced Tuesday that it has raised money to split across a number of new funds.
The move bucks the trend at venture capital firms, which have struggled in recent years to raise money from their backers — endowments, foundations and other institutional investors known as limited partners.
Andreessen Horowitz is one of Silicon Valley's most prominent investment firms, having gained a reputation through early investments in Facebook and Airbnb. It exceeded its target for new funds, according to two people familiar with the matter. It represents one of the largest fundraises by venture capital since the downturn in the sector began about two years ago.
Andreessen announced that $3.75 billion will go to her “growth” fund, which will invest in later-stage startups with an established track record, although this is smaller than the $5 billion growth fund she raised in 2021.
She said $1.25 billion of the money would go to a tool focused on companies building AI infrastructure. Another billion dollars will be allocated to a vehicle targeting artificial intelligence applications.
“In order to best serve the market, we have created custom investment funds, each with its own team of experts and capabilities, with a specific focus on each segment,” Horowitz said in a blog post announcing the funds.
Investment in AI has ballooned in the 18 months since OpenAI's ChatGPT launch in November 2022. An early rush to bet on so-called core models — which underpin popular chatbots like ChatGPT — has pushed the valuations of startups building it, including OpenAI and Anthropic , to levels that are difficult for adventurous investors to guarantee.
Venture capitalists are instead looking to invest in applications built on those models, or the infrastructure needed to develop and operate them.
Andreessen also raised $600 million for both gaming-focused funds and its “Dynamic America” strategy, which supports American startups in aerospace, defense and manufacturing for the national interest.
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The company has not raised new capital for its cryptocurrency fund, which brought in a record $4.5 billion for the vehicle in 2022, much of which has yet to be invested amid a sharp downturn in the digital assets sector.
Project fundraising has declined as a limited number of partners withdraw from risky startup investments in response to rising interest rates.
Globally, venture capital firms raised $555 billion in 2021, according to private markets data firm PitchBook. Last year, they raised a third of that amount, and in the first quarter of this year they raised $30.4 billion, putting the sector on track for its slowest year since 2015.
