The guys at Andreessen Hororwitz are on a hell of a tear. The firm was founded in 2009 and they just announced the closing of their fourth fund at $1.5bn. On top of that they’ve invested in a large number of marquee companies that have had big exits, including this weeks hot story Occulus Rift, and Twitter and AirBnB. They are one of the firms that inspires us here at Forward Partners, particularly for their operational model which we have adapted and extended so it works for early stage in the UK.
One of the other impressive things about Andreessen Horowitz is the quality of their writing and the way they are open with their thinking and investment theses. In the announcement of their new fund they included the following explanation of why now is a good time to be investing in tech, and by extension to be a tech entrepreneur:
We believe this is an incredibly exciting time to be a technology investor. The ultimate market size that this current generation of tech companies can go after dwarfs that of previous ones.
The obvious reason for this is mobile internet penetration: We’ve gone from an internet population of 55 million users to nearly three billion, and smartphone users are expected to grow from 1.5 billion today to five billion in the coming years. The winners in tech today can become massively larger than those of previous decades because the markets they can sell into are enormous, and growing.
Yet as these markets have grown, the technology costs required to support them have fallen dramatically due to developer productivity tools and cloud-based computing.
The ultimate market size that this generation of tech companies can go after dwarfs that of previous ones – that’s a message that can give us all hope going into the weekend.