Andreessen Horowitz, one of the most well-known venture capital funds, is moving closer to raising nearly $7 billion for multiple funds across investment stages with a sector-focus approach, sources told Reuters.
The fundraising efforts, which are expected to close in early April, have involved asking limited partners (LPs) to commit capital to its fourth growth fund, which will account for half of the total target, the sources said.
Capital is also being raised for a follow-on fund for gaming, and three early-stage funds with different focuses — enterprise infrastructure, application, and American Dynamism, which will invest in defense and manufacturing technology.
Known as A16z, the venture capital firm has asked LPs to register their interest in individual funds. It also offers a program for LPs to commit in a master fund that would allocate pro rata across fund offerings, the sources said.
Axios first reported details on the size and timeline for the fundraising. A16z declined to comment.
A16z also told limited partners that artificial intelligence will be the focus of the early-stage funds, as it expects AI to be widely embedded in new software and applications.
Besides gaming, A16z already has other sector-focused funds, including a $1.5 billion biotech fund, and $4.5 billion cryptocurrency fund.
The fundraising goal earmarked for the growth fund represents a cut from $5 billion in late 2021, but still shows the strength of a franchise like A16z in an otherwise slow environment for venture funds, as LPs reevaluate their exposures due to the market pullback.
U.S. VCs raised $67 billion in 2023, the lowest annual total since 2017 and a 60% drop from the $173 billion raised in 2022, according to PitchBook data.
While still committing to established VCs with a solid track record, LPs at the Upfront Summit last week said they are taking a more cautious approach in allocating capital to emerging managers.
Reuters