Andreessen Horowitz closes new fund after raising $1.5 billion

SAN FRANCISCO Thu Mar 27, 2014 6:09pm EDT

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SAN FRANCISCO (Reuters) - Andreessen Horowitz, a venture capital firm that has backed Facebook and Twitter, raised $1.5 billion for a its fourth fund, the firm said in a blog post.

The firm will continue to invest largely in technology businesses, said chief operating officer Scott Kupor in a blog post, based on the thesis that technology markets will grow enormously thanks to developments such as mobile Internet penetration, cloud computing and falling costs.

Sometimes criticized by other venture firms for its techniques such as outsized bets on companies and a heavy emphasis on marketing, Andreessen acknowledged the venture business was going through a difficult time. Specifically, limited partners, those who invest in venture funds, are allocating much less cash to the sector than they were 15 years ago, and fewer venture firms exist.

"While such transitions can indeed be painful, this is a positive sign of a professionalizing market — one in which the supply and the demand are in closer equilibrium," Kupor wrote.

Andreessen, which has backed companies such as Facebook, (FB.O) is part of an elite group of funds which experience little trouble raising more cash.

Earlier this month, Accel Partners raised two funds totaling $1.48 billion.

(Reporting by Sarah McBride; Editing by David Gregorio)

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