Exclusive: Andreessen Horowitz Invests $80 Million in Twitter
Andreessen Horowitz has invested more than $80 million in Twitter via purchasing stock in secondary markets. — When called about it by BoomTown, a spokeswoman at the high-profile Silicon Valley venture firm confirmed the purchase.
Context & Ripple Effects
This buy sits on top of a rapid funding arc: Twitter raised $100 million from Insight, T. Rowe Price and others in September 2009, then closed a $200 million round at a $3.7 billion valuation in December 2010. What makes today's news different is the mechanism — Andreessen Horowitz bought its $80 million-plus stake in secondary markets rather than writing new money into the company, confirming a path Marc Andreessen had flagged when he told PE Hub in December that his firm would go up to $100 million on a single deal.
The move matters because it shows a marquee early-stage firm paying market prices for a slice of a private consumer platform instead of waiting for the next priced round — a signal about where late-stage capital wants to sit ahead of any eventual public offering.
First-order effects
- Andreessen Horowitz now holds a large confirmed position in Twitter without adding new capital to the company's balance sheet, since the stock came from existing holders on secondary markets.
- Twitter gains a high-profile strategic backer at a moment when CEO Dick Costolo is under visible pressure to prove the network can make money.
Second-order effects
- Secondary buyers gain a fresh price reference near the $3.7 billion December mark, making it easier for Twitter employees and early investors to sell shares into later secondaries.
- Other large funds face pressure to compete for scarce late-stage allocations in hot private social companies, tightening supply of big blocks of stock.
Third-order effects
- If firms of Andreessen Horowitz's profile keep buying proven private platforms through secondaries, the line between early-stage venture and growth investing keeps blurring — with pricing set by auction-style secondary demand rather than negotiated rounds.
The trend: Late-stage investors are increasingly buying into scaled private internet companies through secondary markets rather than waiting for new priced rounds.