Venture Capital firm, Andreessen Horowitz is expanding its focus from software to biology and medicine with a new $200 million bio fund. The venture capital firm also hired a former Stanford professor to manage the fund.
The founders of Andreessen Horowitz initially want to focus on software—its primary expertise and stay way from specialty areas such as biotechnology.
Its co-founder Marc Andreesen has been intrigued by potential investments in healthcare despite his initial position not to pursue specialized areas. Andreessen Horowitz noted the increasing number of health-related tech start-ups.
The venture capital firm acknowledged the fact that it is not the first to enter the healthcare industry. In fact, Google showed its interest in integrating technology to deal with health problems when it decided to reorganize its business operations and created Alphabet.
Market observers suggested that $200 million was a significant amount for the bio fund, which will focus on niche areas including cloud technology in biology, computational medicine, and digital therapeutics.
Andreessen Horowitz hired Vijay Pande
Andreessen Horowitz hired Vijay Pande as general partner. He will manage the venture capital firm’s healthcare fund. Pande was a former professor of chemistry, computer science, and structural biology at Stanford University.
Pande supervised an award-winning distriubuted computing lab whose work contributed to the understanding of Alzheimer’s and Huntington disease as well as different types of cancer. He co-founded that Golbavir BioSciences.
A huge market opportunity
According to Pande, Andreessen Horowitz created a bio fund because there is a huge market opportunity. He also emphasized that they care about human health.
According to him, “It’s a big deal on a very deep, fundamental level, in terms of thinking about the meaning of life. At a much more mundane business level, there’s clearly a huge market opportunity here.” He noted that the US healthcare budget is $2 trillion—a huge market for startups to go after.
Pande emphasized that Andreessen Horowitz has been excited to invest in the bio for a while because it is an area where there is a chance to change the world.
He said, Andreessen Horowitz made investments in the area before even launching a bio fund. According to him, they created separate fund because they want to “something really big.”
Pande said the fund will be investing in less capital-intensive companies like Omada Health, a start-up that uses technology to address chronic conditions such as obesity. The startup is supported by Andreesen Horowitz’s main fund.
According to Pande, the bio fund will make one Series A investment and 2 to 3 seed investments quarterly. He said Series A investments normally start at few million dollars while seed investments start at a few hundred thousand dollars.