Venture Capital

Ranking the Best a16z Investments of All Time

Andreessen Horowitz (a16z) is a major venture capital firm known for investing in some of the most inventive and successful firms of the twenty-first century. A 16z has invested in over 300 firms since its inception in 2009, and has been involved in the early phases of several of today's most successful technology startups. In this write-up, we will look at five of a16z's most successful investments and explore what each business does as well as the role that a16z had in their success.

Airbnb is a platform where individuals can rent out their homes or other properties to tourists. A 16z was one of the company's early investors, contributing in a $600,000 seed round in 2009. Since then, Andressen Horowitz has remained a majority investor in the firm, and as of 2021, Airbnb is worth more than $100 billion. A 16z was essential in assisting Airbnb in scaling its company and navigating the legal and regulatory hurdles that arose as it expanded, something that a seasoned venture capital firm would have plentiful experience in, but greener entrepreneurs wouldn't be so talented. In 2008, Brian Chesky, Joe Gebbia, and Nathan Blecharczyk established the startup by renting out air mattresses in their apartment to participants of a design conference in San Francisco who couldn't find a place to stay. From then, the concept grew into tourists renting out full homes, apartments, campsites, and even elephants and flying saucers. With over 4 million listings in over 190 countries, Airbnb is now one of the entire globe's most popular vacation lodgings providers.

Slack is a collaboration and communication software that enables organizations to cooperate and communicate more effectively, saving hundreds of inter-company emails daily (something we are greatly thankful for). In 2017, a16z invested in Slack in a $120 million series F round, and the company is valued at more than $26 billion as of 2023. A a16z was instrumental in assisting Slack in expanding its reach by linking it with its early enterprise clients, as well as providing strategic advise on how to expand its user base and further monetization of services. Stewart Butterfield, Eric Costello, Cal Henderson, and Serguei Mourachov started the firm in 2013. Slack's platform arose from discontent with the team's prior communication tools (primarily email), which were not satisfying their demands for instantaneous and informal banter. The creators desired a tool that was more user-friendly, efficient, and dependable, and they were obviously ultimately successful. Slack is now one of the most popular team communication applications, with over 19 million daily active users.

Instacart is a supermarket delivery service that enables everyday people to purchase goods online and have them delivered to their homes. A 16z invested in Instacart in a $44 million series C round in 2014, and the company is valued at more than $24 billion as of 2022. A 16z was crucial in assisting Instacart in scaling its company and navigating the extremely competitive grocery delivery industry (not to mention the make-or-break B2C business model). Apoorva Mehta, Brandon Leonardo, and Max Mullen launched the firm in 2012. The founders were left to build Instacart after being uninspired by the current choices, a frequent story for deca-corn companies, which shows that a startup doesn't always have to re-invent the wheel. Instacart is now one of the most popular grocery delivery businesses in the United States, serving over 75,000 locations.

Robinhood is a financial services firm that provides commission-free stock and other securities trading (including cryptocurrency). A 16z invested in Robinhood in a $110 million series D round in 2017, and the company is valued at more than $8 billion as of 2023 (a decrease of $3 billion over the past three years). Vladimir Tenev and Baiju Bhatt launched the firm in 2013 with the purpose of making the stock market accessible to everyone, after looking through intimidating trading platforms with confusing numbers and statistics. They intended to build a platform that was simple to use, inexpensive, and reduced obstacles to entry for private investors.

Postmates is a meal delivery and logistics service that enables users to order food from their favorite restaurants and have it delivered to their homes. In 2011, A16z invested in Postmates in a $16 million series A investment, and the company is now valued at more than $2 billion as of 2021. A16z stepped in to assist founders  Bastian Lehmann, Sean Plaice, and Sam Street navigate the tricky and often described saturated food delivery market.  They intended to build a platform where clients could order from any restaurant and have it delivered to their door, which has transformed into owning their own locations for non-perishable goods to reduce costs in major markets. Postmates is now one of the most popular meal delivery businesses in the United States, serving over 4,200 cities and towns.

To conclude, A16z has been a prominent player in the venture capital business from its inception, and has been involved in the early phases of many of our era's most successful startups-turned decacorns. A 16z has a strong track record of spotting and investing in the next big thing, with a focus on creative companies that are transforming the way we live and work, showing that they are spot on in picking disruptive and differentiated teams and products. Airbnb, Slack, Instacart, Robinhood, and Postmates are all valued at more than $1 billion, demonstrating the success of A16z's investments and the critical role they played in the growth of these firms (which often comes from connecting one another and building a flywheel effect between portfolio companies, which is one of the core value propositions major investors have to offer beyond their wisdom-inducing battle scars.  eThe firm's emphasis on long-term investments, as well as its readiness to support its portfolio businesses during difficult times (seeing stories of Marc Andressen step in personally on portfolio companies going haywire is always an awesome show of caring), has contributed to its reputation as one of the greatest venture capital firms in the industry.

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