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It might be the most famous quote from the past decade of VC: “Software is eating the world.” Ever since an essay by Marc Andreessen launched the idea into the public consciousness back in 2011, the investors at Andreessen Horowitz have gone about putting their money where Andreessen’s mouth is, staking early-stage startups in nearly every possible subsector of the software realm.
And in 2019, it might just result in a truly stunning cascade of cash.
The firm was one of the largest VC backers of Lyft, with a pre-IPO stake of more than 15 million shares; at Friday’s closing stock price of $78.29, those shares had a combined worth of around $1.2 billion. And it’s not like a16z hopped on the Lyft train when the company was already an established unicorn. It first staked the business back in 2013, supporting a $60 million Series C that valued Lyft at $275 million—or about 1/100th of what reports are indicating is the company’s fully diluted post-IPO valuation.
Andreessen Horowitz was also an early backer of Pinterest, investing in a $27 million Series B at a $266 million valuation in 2011. The company’s current valuation: $12.3 billion. The firm backed Slack when it was still a gaming startup called Tiny Speck developing a chat app on the side, joining a round that came with a $24 million valuation. In the nine years since, the company’s on-paper valuation has increased nearly 300 times over.
The list continues. Andreessen Horowitz was one of the very first investors in Robinhood, participating in a $3 million seed round in 2013; it also joined a $2 million seed investment in Stripe during 2011. Robinhood is now worth $5.6 billion, and Stripe’s valuation has skyrocketed to a reported $22.5 billion.
It’s unclear exactly what sort of stake a16z currently owns in that cohort of companies. It’s unclear if they’ll all actually go public before the year is out, perhaps even unlikely—Stripe, in particular, has said it might not conduct an IPO anytime soon.
But one thing is very clear indeed: a16z has shown a highly lucrative knack for identifying the next big thing.
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