Venture capital firm Andreessen Horowitz is reportedly in early talks to raise an estimated $20 billion as it takes advantage of the global investor’s interest to tap into US AI companies.
If successful, this will be the largest fund in its history of the asset class, surpassed only by Softbank’s flagship Vision Funds 1 and 2, often viewed as a typical traditional venture capital, and Sequoia’s master fund that has accumulated capital over a longer period of time. It would also surpass the total sum of US venture funds closed during Q1 this year.
A16z has pitched its plan around the world
Known informally as a16z, the company has discussed with limited partners that the fund will be dedicated to growth-stage investment in AI companies. According to Reuters, citing sources with knowledge of the developments, this comes as the company is also looking at drawing global investors who are keen on investing in budding US AI companies.
The record fundraising come against the backdrop of sweeping plan by President Donald Trump to encourage the companies to manufacture goods in the US.
For a16z to raise such a huge amount, the venture capital firm has been pitching its plan around the world.
According to Reuters, citing one of the sources, international LPs view the fund as a way to invest their money more easily into US AI companies without restrictions.
The company’s founders, venture capitalists Marc Andreessen and Ben Horowitz revealed last year that they would throw their weight behind President Trump, departing from their traditional support for Democratic candidates. This sentiment was also shared by several other prominent Silicon Valley figures like Elon Musk.
While a16z is known for raising some of Silicon Valley’s largest investment vehicles, this one would be a significant step up in scale. According to Reuters, it would test LP’s interest in venture capital amid global economic turmoil and continue the debate over how scalable this asset class is while maintaining attractive returns.
If successfully raised, this will be one of the largest, only second to SoftBank’s Vision Fund 1 which was launched in 2017 and achieved a record of $100 billion. Vision Fund 2 manages an estimated $56 billion from Softbank’s balance sheet.
Sequoia Capital, another Silicon Valley venture capital firm has more than $56 billion in assets under management across several funds with its evergreen fund growing to $19.6 billion this year, as per filings.
Andreessen Horowitz’s biggest fund so far is a $5 billion growth-stage fund which it raised, and was part of a $9 billion fundraise, announced in 2022.
Similarly, it asked LPs to commit capital into a grab bag of funds, each focused on a different stage startup maturity to secure a $7.2 billion haul in 2024, $3.75 billion for a growth fund.
Andreessen Horowitz exhibited appetite for big funding rounds from the onset
Founded in 2009, a16z made its way on the venture capital arena with ambitions to disrupt the industry by going bigger, raising funds that are larger than the usual industry norm outbidding the traditional blue-chip investors.
As a result, the company won stakes in some promising startups, further separating itself from the rest coupled with hiring staff to support those companies.
Its first $300 million fund was considered a huge debut fund at that time.
A16z remained aggressive in backing several companies in the AI field, participating in billion funding rounds as the lead investor in AI model developer startups to include xAI, Safe Superintelligence and Mistral, the French based AI firm.
The venture capital firm has also purchased shares in the ChatGPT maker OpenAI through a tender offer in the secondary transaction market.
According to its website, the company now manages $45 billion of assets under management. It became a registered investment advisor in 2019, gaining more flexibility in investment style beyond the traditional venture capitalists.
It also runs several sector-specific funds that invest in categories such as biotechnology, cryptocurrency, and defence tech.
Regarding AI firms, a16z recently put together a cluster of thousands of Nvidia’s GPUs it advertised for rent to startups in its investment portfolio that might face difficulties in securing access to the chips.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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