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Andreessen Horowitz Launches $450M Bio Fund

NEW YORK (GenomeWeb) – Venture capital firm Andreessen Horowitz today launched its second biology fund to invest in computational biology, biotech, biopharmaceuticals, and diagnostics technologies. This one includes a commitment of $450 million, more than twice the $200 million the firm invested in its first bio fund that started two years ago.

While the initial fund started out looking for entrepreneurs at the nexus of biology and computer science, it evolved to add engineering to the mix as the Andreessen Horowitz team started seeing engineering-based responses to biology issues — including some biology companies not in healthcare per se. The new, second fund will continue this philosophy.

According to Andreessen Horowitz General Partner Jorge Conde, the VC firm has noted a "convergence" of three engineering disciplines, namely microfluidics, optics, and computation.

Next-generation sequencing, for example, has become "essential" technology for bio-focused investors, he said, as has CRISPR because of its usefulness in validating therapeutic targets.

"The [companies] we're interested in are the ones that can take an engineering approach to biology rather than an empirical approach," Conde said.

"We look to take out the science risk," Conde said. He would like to invest in companies building algorithms to "iterate, iterate, iterate" to automate the trial-and-error process and make it less expensive while adding a bit of "certainty" to scientific processes, he said.

This does include the application of AI to find and test therapeutics and diagnostics. "Genomics is a big part of this," Conde noted.

"We continue to be interested in computational biomedicine, applying AI and ML to diagnostics and therapeutics; new bio utilities or tools that make it easier to 'read,' 'write,' or edit and synthesize DNA, and 'execute' biology (that is, program and design organisms), as well as advance bioengineering itself; and of course, network effects that play out across the entire healthcare value chain including payers, providers, and patients," Conde and another general partner, Vijay Pande, explained on the Andreessen Horowitz blog.

The two likened the state of biology today to information technology 50 years ago, poised to change lives and disrupt virtually every industry. "If information technology is about moving around bits of information, bio is about mastering our ability to move around atoms and molecules. Bio is not an industry vertical; it will be a part of every industry," Conde and Pande wrote.

Conde told GenomeWeb that since launching the first bio fund, Menlo Park, California-based Andreessen Horowitz has discovered "an extraordinary group of entrepreneurs" who not only know the biosciences, but are also proficient at engineering and coding.

Conde said the VC firm will look to invest in entrepreneurial companies at various stages of the business life cycle. "It's a very wide aperture to go after companies," he said.

The first Andreessen Horowitz bio fund has invested in 12 companies, including: Apeel, maker of a nanoscale coating to slow down the spoiling process in fruits and vegetables; drug discovery company BioAge Labs; and Freenome, which is developing noninvasive technology for the early detection of cancer.