“We’re generally not a good candidate for startups in emerging markets like India, although never say never,” venture capitalist Marc Andreessen wrote in response to a Quora question in May 2012. Nine years later, his firm, Andreessen Horowitz, has earmarked $500 million to invest in Indian startups, according to a TechCrunch report on May 3.
It’s not much money. Several foreign firms like Japan’s Softbank and US-based Tiger Global have pumped in billions in the world’s third largest startup ecosystem over the last few years. In 2021, VCs collectively invested upwards of $23.5 billion in Indian startups, according to PitchBook data, minting 17 new unicorns in the process.
And just six years ago, the company’s high-profile founder, Marc Andreessen, was forced to apologize after comparing India’s rejection of Facebook’s Free Basic’s program to its anti-colonial movement. Now, however, one of the key Silicon Valley VC firms is ready to make a commitment to the Indian market.
Andreessen Horowitz is a late arrival in India
Co-founded by Marc Andreessen and Ben Horowitz in 2009, the “stage-agnostic” firm has backed hundreds of startups over the last decade. However, its portfolio has been very American until very recently.
Back in 2012, Andreessen cited not having anyone “on the ground anywhere but Silicon Valley and the United States” as a reason not to invest in India. In a talk at the Stanford Graduate School of Business in 2016, he once again voiced concerns: “There’s the fundamental problem that if the local team is really good, then they can easily leave and run their own firms. If they are bad, they stay working for me…which has its own issues.”
But the firm is finally dipping its toes in less familiar waters. A couple of years ago, it started upping investments in Latin America. In October 2021, the firm made its maiden investment in India, with Bengaluru-based cryptocurrency exchange CoinSwitch. Its first African startup bet came in January 2022. Now, it’s looking to hire for several investment roles in India, according to the TechCrunch report.
Andreessen Horowitz’s foray into India comes at a time when not just established behemoths, but also budding investors, are paying closer attention to the market. There was a 37% year-on-year rise in first-time global investors in 2021. With China becoming less appealing, India is on everyone’s radar.