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04:01 PM

VC Firm Andreessen Horowitz Raises $650 Million

Second round of fundraising by firm that includes former Netscape founder Marc Andreessen will be invested in tech startups.

Venture capital firm Andreessen Horowitz has raised an additional $650 million to invest in technology startups.

The firm, whose general partners include former Netscape Communications founder Marc Andreessen, launched in June 2009 with an initial fund of $300 million. The second round of fundraising, announced Wednesday, raises the firm's investment capital to nearly $1 billion.

Andreessen Horowitz said the additional money would be used to invest in startups that are just launching or are already growing. "As a matter of core philosophy, we invest in companies, not stages -- we're stage-agnostic," general partner Ben Horowitz said in a statement.

The firm's portfolio includes investments in 28 companies, including Zynga, which makes the most popular games on Facebook. Andreessen Horowitz also led the second round of funding for Foursquare, a maker of location-based games for mobile phones that owns a piece of Internet telephony company Skype.

The firm's investments typically range from $50,000 to get a new company started to $50 million to those already growing. While acknowledging it could have raised more money, Andreessen Horowitz said it stopped at $650 million to avoid having to lower the criteria in order to make more investments.

"We have seen other firms raise so much money that they lower their quality bar in order to 'put the money to work,' " Horowitz said in his blog. "We would strongly prefer to run out of money sooner and be forced to raise a third fund than to have that problem."

Horowitz said the second round of fundraising was needed quickly because the firm's initial investments stemmed from investments Horowitz and Andreessen had made as angel investors before launching the firm. Many of those angel investments had become venture-stage startups by the time the partners formed the VC firm. Those startups included RockMelt, Nicira and Apptio. In addition, the firm had invested $50 million in Skype.


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