A16z raises second gaming fund at $600M as part of $7.2B funding
A16z Games Speedrun is taking applications for its third class.
A16z announced that it has raised a new $600 million games fund as part of a $7.2 billion raise for the venture capital company started by Marc Andressen and Ben Horowitz.
Horowitz said that the $7.2 billion will be spread among the following venture strategies: American dynamism ($600 million), apps ($1 billion), games ($600 million), infrastructure ($1.25 billion), and growth ($3.75 billion). It’s an especially important time for games as the game industry has been in a funk with 20,000 layoffs in the past year and a half.
A16z previously raised $600 million for its games fund, announcing it in May 22. To date, it has now raised $1.2 billion for gaming.
“This marks an important milestone for us,” Horowitz said in his post. “When Marc and I started the firm in 2009, the conventional wisdom in venture capital was that in any given year, only 15 companies would ever generate $100 million in revenue and those 15 companies would drive almost all of VC returns. At that time, the conventional wisdom was right. Venture capital firms configured themselves to address a market of 15 important companies. This meant relatively small fund sizes and a small number of partners in a single fund was the optimal approach. Andreessen Horowitz began in exactly this way with a $300 million fund and 2 General Partners.”
He added, “Shortly after we started the firm, all that began to change. My partner Marc saw the new world coming and wrote about it in 2011 in a piece called, ‘Software is Eating the World.’ What he predicted then came true. In the past 10 years, nearly every significant business has been reimagined as a software company, and the market for these companies has, as a result, increased dramatically. Along the way, each submarket – American Dynamism, Apps (Consumer, Enterprise, Fintech), Bio+Health, Crypto, Games, Growth, and Infrastructure – has become as big as the original entire Venture Capital market.”
And Horowitz said, “As a result, to win in each category, we needed to expand from one great investor in each segment to a dedicated investing team with a differentiated platform in each category to help the best founders in those fields build amazing companies. Each area requires deep expertise, so it’s not wise to try to cross-train someone in, for example, Games and Infrastructure. More importantly, founders building AI foundation models need an entirely different set of networks and capabilities than founders building biotech therapies.”
To best serve the market, A16z created dedicated venture funds, each with its own team of experts and capabilities, specifically focused on each segment.
Jonathan Lai, partner at A16z, announced the games fund in a tweet.
Lai said in his tweet, “After a decade in the games industry, I believe there’s never been a better time to build a game startup than today: There are more players and platforms than ever before — more tools and tech to help build games than ever before — more funding for game startups than ever before.”
He said the firm invests in founders at the earliest stages and are often first money in through the A16z Games Speedrun — now accepting applications for the summer batch.
“We roll up our sleeves to help our companies grow and invest across preseed -> seed -> Series A/B,” he said.
He said the firm will invest in game studios building new types of games, game infrastructure powering the next generation of developers, and games x consumer, or the the ecosystem of consumer apps around games.
