Andreessen Horowitz Raises Extra $200 Million for Fund

Andreessen Horowitz, the venture firm co-founded by Web pioneer Marc Andreessen, said it raised an extra $200 million for a fund aimed at growth investments, bringing the company’s total assets to $1.2 billion.

The extra money will build on investments made by its $650 million Fund II, announced in November, the Menlo Park, California-based firm said today.

“We’re enabling ourselves to write bigger checks for great companies,” General Partner John O’Farrell said in an interview. “Growth companies have very large capital needs, and it’s not unusual for them to be raising rounds of $50, $60 or even $100 million.”

Started in 2009 by Andreessen and fellow Netscape Communications Corp. veteran Ben Horowitz, the venture capital firm has added staff and invested in many of the biggest startups. The list includes Groupon Inc., Zynga Inc. and Skype Technologies SA. The firm invests in both early-stage startups, which may take as little as $50,000, and more established growth companies, which often raise tens of millions of dollars.

Andreessen Horowitz invested $49 million in Bluetooth headset maker Jawbone last month. In February, the venture capitalist led an $18 million investment round in gaming startup TinyCo and participated in a $48 million funding of Internet-storage company Box.net.

New Partners

The firm also added two technology industry veterans to its roster in recent weeks. Scott Weiss, the former chief executive officer of IronPort Systems Inc., became general partner, and Peter Levine, an alumnus of Veritas Software, was named venture partner.

The venture industry aims to rebound from a slump that began before the recession. Venture-capital fundraising declined last year for the fourth straight year, dropping 25 percent to $12.3 billion, according to the National Venture Capital Association. Funding has tumbled by more than half since 2005 as a dearth of initial public offerings hurt returns at venture firms.

The add-on fund will be terminated once the original investment pool is completely spent, and any remaining money will be returned to partners.

Bloomberg LP, which owns Bloomberg News, is an investor in Andreessen Horowitz.

To contact the reporter on this story: Douglas MacMillan in San Francisco at Dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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