In buying Oculus, Facebook has become Andreessen Horowitz’s billion-dollar candy machine

Seeing into the future.
Seeing into the future.
Image: AP/Jeff Chiu
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Storied venture capital firm Andreessen Horowitz was an early investor in Facebook. It also put money into Instagram, which sold to Facebook for about $1 billion in 2012. And now, Facebook has bought another Andreessen Horowitz investment, virtual reality startup Oculus VR, for roughly $2 billion.

Marc Andreessen, who sits on the board of both Facebook and Oculus VR, suggested in a tweet that he was well aware of the latest deal, but said he didn’t get involved.

Only three months ago, Andreessen Horowitz led an investment round that put $75 million into Oculus. That valued Oculus at about $250 million, or one eighth of the amount for which it just sold to Facebook.

We’re not suggesting any impropriety. One of the advantages of being the dominant venture capital firm in Silicon Valley is to leverage connections among various investments.

Andreessen Horowitz made $78 million from its $250,000 investment in Instagram. It’s possible that the stake in Oculus will have proven even more profitable.