Analyzing the Seed Venture Capital Portfolio of Andreessen Horowitz

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A16Z has said their pace of seed investments will be slowing. To date, eCommerce makes up the highest number of Andreessen Horowitz’s seed deals. At 57%, A16Z’s seed company follow-on rate is better than the industry average. 

Andreessen Horowitz was among the top two most active tech VC investors at the seed and Series A stages in 2013. But after closing its latest $1.5B fund, it appears Andreessen Horowitz is going to be dialing back its torrid pace at the seed-stage. In January, Marc Andreessen said that outside of fringe opportunities, the firm will be “pulling back significantly on the number of seed investments (it’s) making.” And earlier this month, Fortune’s Dan Primack reported that Y Combinator would be launching a new investment vehicle unlikely to include VC backers, including A16Z.

Given the apparent pullback, we wanted to take a look at A16Z’s current seed portfolio in order to see the sub-industry and follow-on trends of the mega VC fund.

The chart below breaks down A16Z’s deal activity by stage since 2010. A16Z’s seed pullback comes after the firm completed its highest share of seed deals since 2010 in 2013. In fact, seed deals made up a notable one-half of the of the venture firm’s investments in 2013.  Although the firm has stated its intention to pull back seed deals in 2014, through Q1, seed stage deals still comprise over 1/3 of the firm’s investments.

Looking at the sub-industries of Andreessen Horowitz seed-stage investments over the past four years, we see that the venture firm has completed its highest number of deals to eCommerce companies. A16Z-seeded eCommerce startups include Homejoy, Getable and Shoptiques. The top 3 is rounded out by companies in the BI, Analytics and Performance Management and  HR & Workforce Management spaces. As we noted earlier, A16Z has been among the most active early-stage investors by deal tallies in the surge of financing to HR tech companies.

The chart below details the top 15 sub-industries by share of companies that received seed funding by A16Z over the period.

Lastly, we looked at Andreessen Horowitz seed follow-on rate across its entire seed portfolio excluding seed investments made in the past 13 months (the avg. amount of time seeded companies need to raise follow-on financing). And while our seed investing report found that nearly 39% of seeded companies go onto raise follow-on financing on average, A16Z seeded companies saw a follow-on rate of 57%.  Of note, 69% of A16Z’s mobile companies have gone on to receive follow-on financing.

By Jarrett Neil Ridlinghafer 
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