Little Speakers, Big Bet: Andreessen Horowitz Invests $49 Million in Headset-Maker Jawbone
Little speakers, big bet: VC shop Andreessen Horowitz is putting $49 million into Jawbone, the company best known for its slim mobile headsets. — There aren't any other investors joining Andreessen Horowitz in the round.
Context & Ripple Effects
Andreessen Horowitz entered 2011 with nearly $1 billion raised in 18 months, including a second $650 million fund, and had said it was pursuing late-stage growth capital beyond super-angel investing. Its more than $80 million secondary-market purchase of Twitter stock had already shown a willingness to write large checks outside a conventional early-stage model.
The Jawbone round puts that strategy into a company financing: Andreessen Horowitz is the sole investor, rather than part of a syndicated round. The firm had also expanded its investing partnership with IronPort co-founder Scott Weiss.
First-order effects
- Jawbone receives $49 million from a single investor, giving Andreessen Horowitz a concentrated ownership position and simplifying the round's investor base.
- Andreessen Horowitz deploys its larger fund base in a growth-capital investment, reinforcing its stated move beyond super-angel-sized bets.
Second-order effects
- Andreessen Horowitz's ability to make a $49 million solo commitment raises the competitive bar for venture firms seeking stakes in later-stage technology companies.
- Companies seeking growth financing gain another investor whose demonstrated approach spans both direct rounds and large secondary-market purchases, as with its Twitter stake.
Third-order effects
- If more venture firms follow Andreessen Horowitz into large, concentrated growth investments, the boundary between early-stage venture capital and later-stage private financing will narrow.
- The model favors firms with large funds and operating support: capital concentration becomes a competitive asset alongside deal sourcing.
The trend: Venture firms are using larger funds to compete for later-stage technology stakes, not only to seed startups.